SOUTH DAKOTA LOTTERY
711 E. WELLS AVE PIERRE, SOUTH DAKOTA 57501-3398
Online Central System, Video Lottery Central System, and Related Services
PROPOSALS ARE DUE NO LATER THAN 4:00 CTZ, APRIL 20, 2018
RFP #:1160 BUYER: Norm Lingle EMAIL: [email protected]
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1. RFP GENERAL INFORMATION
1.1. Introduction and Objectives
The South Dakota Lottery, (hereinafter “Lottery”) is issuing this Request for Proposals
(RFP) to solicit proposals from responsible, responsive and experienced lottery gaming
vendors for an on-line gaming system, a video lottery central system, and related
services. The systems will replace the systems provided under contract with the Lottery’s
current on-line and video lottery vendors.
The current on-line contract expires on August 2, 2019. The initial period of contract
performance will be from approximately August 3, 2019, through August 2, 2026, with
extension options for additional periods for a total contract term not to exceed 15 years.
The current video lottery contract expires on November 16, 2019. The initial period of
contract performance will be from approximately November 17, 2019, through
November 16, 2026, with extension options for additional periods for a total contract
term not to exceed 15 years.
The successful vendor(s) will provide fully-functioning systems, including hardware,
software, communications, system installation, data conversion and system operation
through the life of any subsequent contract that may result from this solicitation. The
Lottery’s goal is to obtain systems that will provide the best value in technology available
today that also will provide the greatest flexibility to adapt to changes in the future. This
includes the ability to seamlessly connect with third party software and hardware.
The successful vendor(s) must ensure that the On-line Central System is fully operational
no later than August 3, 2019, that the Video Lottery Central System is fully operational
no later than November 17, 2019, and that there are no interruptions of existing Lottery
games during conversion.
1.2. Governing Law
Establishment for any and all legal action regarding or arising out of the transaction
covered herein shall be solely in the State of South Dakota. The laws of South Dakota
shall govern this transaction.
SDCL § 42-7A-5, Competitive bidding required before entering into contracts. If entering
into any contract pursuant to subdivision 42-7A-4(3), the executive director shall utilize
an open and competitive bid process which reflects the best interest of the State of South
Dakota. Any such contract is exempt from the provisions of chapters 5-18A and 5-18D.
The executive director shall consider all relevant factors including security, competence,
experience, timely performance, and maximization of net revenues to the state. Any
contract entered into pursuant to subdivision 42-7A-4(3) for major procurements are
subject to the approval of the commission and are subject to the provisions of chapters 5-
18A and 5-18D.
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1.3. Non-Discrimination Statement
The State of South Dakota requires that all contractors, vendors, and suppliers doing
business with any State agency, department, or institution, provide a statement of non-
discrimination. By signing and submitting their proposal, the Vendor certifies they do not
discriminate in their employment practices with regard to race, color, creed, religion, age,
sex, ancestry, national origin, or disability.
1.4. Issuing Office and RFP Reference Number
This RFP and all subsequent addenda relating to it are issued through the South Dakota
Lottery on behalf of the State of South Dakota. The reference number for the transaction
is RFP# 1160. This number must be referred to on all proposals, correspondence, and
documentation relating to the RFP. The RFP Coordinator is the sole point of contact for
this procurement. Any other communication that isn’t directed to the RFP Coordinator
will be considered unofficial and non-binding on the Lottery. The RFP Coordinator shall
be solely responsible for the clarification, amendment, modification or withdrawal of
specifications, requirements, terms and conditions of the RFP. There shall be no
communication with any other State employee regarding this RFP except with designated
state participants in attendance ONLY DURING:
• Negotiations
• Contract Signing
• as otherwise specified in this RFP
Violations of this provision by vendor or state agency personnel may result in the
rejection of the proposal.
1.5. RFP & Contract Coordinators
The RFP Coordinator is:
Clark Hepper
Lottery Deputy Executive Director
711 E. Wells Ave.
Pierre, SD 57501
Phone: (605) 773-5770
Fax: (605) 773-5786
Email: [email protected].
1.6. Term of Contracts
The initial period of contract performance for the On-line Central System will be from
approximately August 3, 2019, through August 2, 2026, with extension options for
additional periods for a total contract term not to exceed fifteen (15) years. The Lottery
will notify the Vendor in writing of its intent to extend the contract not later than ninety
(90) days before the beginning of any extension period.
The initial period of contract performance for the Video Lottery Central System will be
from approximately November 17, 2019 through November 16, 2026, with extension
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options for additional periods for a total contract term not to exceed fifteen (15) years. If
the Lottery exercises the extensions available to it with its current contractor, the initial
period of contract performance may be delayed as determined by negotiations. The
Lottery will notify the Vendor in writing of its intent to extend the contract not later than
ninety (90) days before the beginning of any extension period.
For any related services that may be acquired independent of the central systems as a
result of this RFP, the term length of the contract(s) shall be determined through
negotiations.
1.7. Submission of Proposals
All proposals must be completed and received by the Lottery by the date and time
indicated in the Procurement Schedules.
Proposals received after the deadline will be late and ineligible for consideration. When
submitting, Vendors must include one (1) original and eight (8) hard copies of both the
Technical Proposal and the Cost Proposal. Electronic versions of the proposals in
Microsoft® Word, Excel, or searchable PDF® should be included on USB flash drives
as follows: two (2) copies of the complete proposals as well as ten (10) copies of
redacted versions. Technical and cost proposals shall be submitted on separate media.
The cost proposal must be in a separate sealed envelope and labeled “Cost Proposal”.
The Bid Bond and Litigation Bond shall be included in the same envelope as the Cost
Proposal.
All proposals must be signed, in ink, by an officer of the responder, legally authorized to
bind the responder to the proposal, and sealed in the form intended by the respondent.
Proposals that are not properly signed may be rejected. The sealed envelope or container
must be marked with the appropriate RFP Number and Title. The words “Sealed
Proposal Enclosed” must be prominently denoted on the outside of the shipping
container.
No proposal shall be accepted from, and no contract or purchase order shall be awarded
to, any person, firm, or corporation that is in arrears upon any obligations to the State of
South Dakota, or that otherwise may be deemed irresponsible or unreliable by the State
of South Dakota.
1.8. Incurred Costs Associated with Proposals
It is recommended that each Proposal be prepared simply and economically, thus
providing a straightforward, concise description of the vendor's ability to meet the
requirements of the RFP. Emphasis should be on completeness and clarity of content.
The vendor must not hold the Lottery liable for any of the costs incurred by a vendor in
preparing or submitting a Proposal including preparation, copying, postage and delivery
fees, and expenses associated with any demonstrations and/or presentations, which may
be required by the RFP.
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1.9. Preparation and Content of Proposal
Vendors should provide the Lottery with information, evidence, and demonstrations in a
manner that best serves the interests of the Lottery. Vendors will be given wide latitude in
the degree of detail they offer or the extent to which they reveal plans, designs, systems,
processes, and procedures, but at a minimum, Proposals must be fully responsive to the
specific requirements stated in the RFP.
Vendors may submit a proposal to either the online central system, the video lottery
central system or related services or a combination thereof. Vendor proposal for only the
online central system, video lottery central system or related services may not exceed 600
pages. If a vendor is submitting a proposal for a combination of the online central
system, video lottery central system and/or related services the page limit is 900 pages.
All proposed hardware, software, and services must be included in the final delivered
system upon conversion unless otherwise specified (with the exception of options not
selected by the Lottery). Each Proposal must identify any requirement of the published
RFP that the vendor cannot satisfy.
In case of error in price computations or totals, the unit price shall govern. The Lottery
has the right to rely on any prices provided by vendors. The vendor shall be responsible
for any mathematical errors. The Lottery reserves the right to reject proposals which
contain errors.
A proposal shall not be considered for award if the price in the proposal was not arrived
at independently and without collusion, consultation, communication or agreement as to
any matter related to price with any other vendor, competitor or public officer/employee.
1.10. Response to Technical and Non-Price Requirements
The Technical Proposal must contain and respond to all of the information required in
Parts 4 and/or 5 (Technical Specifications) of the RFP. Cost information must not appear
in any portion of the Technical Proposal. The inclusion of cost information in the
Technical Proposal may result in disqualification of the Vendor.
All pages of the Technical Proposal must be numbered. Conciseness and clarity of
content are essential. The Technical Proposal must be complete. A Technical Proposal
not providing all of the information requested may be rejected. The Technical Proposal
should provide all of the information concerning the particular subject area that the
vendor believes would be helpful to the Lottery in determining its ability to meet the
specifications or perform the requirements in the Vendor's description of its system or
related services.
The Vendor must state whether any of the critical deliverables and/or services will be
provided by a sub-Vendor or consultant. If any of the critical deliverables and/or services
will be provided by a sub-Vendor or consultant, the Vendor must state the name of the
sub-Vendor or consultant and state the function or service that will be performed by that
sub-Vendor or consultant.
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1.11. Public Records and Requests for Confidentiality
All Proposals received shall remain confidential until any contract resulting from this
RFP has been approved by the South Dakota Lottery Commission and signed by the
South Dakota Secretary of Revenue and the Vendor. Thereafter, the proposals shall be
deemed public records as defined in South Dakota law.
Any information in a Proposal that the Vendor desires to claim as proprietary and exempt
from disclosure under the provisions of South Dakota law must be clearly designated as
such. Each affected page or portion of the Proposal must be identified as such, and the
particular disclosure exemption upon which the Vendor bases its claim must be clearly
stated on each such page or portion. Each page or portion claimed to be exempt from
disclosure must be clearly identified by the word “Confidential” printed on the lower
right hand corner. The Lottery will consider a Vendor’s request for exemption from
disclosure. However, the Lottery will base its disclosure decision on South Dakota law.
The Vendor must be reasonable in designating information as confidential. The Lottery
will not honor a Vendor’s decision to mark its entire proposal, or large undifferentiated
Proposal components, as exempt from disclosure. An entire page or paragraph in which
such information appears should not be marked “Confidential” unless the entire page or
paragraph consists of such confidential information. Only the confidential portion(s)
should be so identified and marked. The vendor must be able to defend the confidentiality
of its trade secrets through the judicial process. If any information is marked as
proprietary in the Proposal, that information will not be made available until the affected
Vendor has been given an opportunity to seek a court injunction against the requested
disclosure.
1.12. Disclosure Prohibition
Information provided in a Proposal must be held in confidence by the Vendor and not be
revealed or discussed with competitors except as required by jurisdictional law.
Disclosure by a Vendor of the contents of a Proposal, prior to the execution of the
Contract with the Successful Vendor, may result in the Vendor's disqualification.
The Proposals must remain confidential while the Evaluation Committee reviews all of
the Proposals submitted in response to the RFP.
The Proposals will be available for inspection according to Lottery policy and
jurisdictional law after the Notice of Intent to award a Contract is announced by the
Lottery Director. All matters set forth in a Vendor's Proposal may be subject to disclosure
after Contract. Once again, the Lottery will base its disclosure decision on existing South
Dakota law.
1.13. Specified and Invited Options
Any options included in the base price should be so noted in the Technical and Price
Proposals. The definition and policy associated with each of the option classes should be
included as follows:
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A. Specified Options must be identified in the published RFP as “Specified”.
i. Specified Options must be proposed by the Vendor – a Proposal may be rejected
if a Specified Option is not included.
ii. The Lottery does not commit to any quantity or timing for acquisition of a
Specified Option.
B. Invited Options are identified in the published RFP as “Invited Option.”
i. Invited Options are items of specific interest to the Lottery.
ii. Vendors are not obligated to include Invited Options in their Proposals; however,
if specifications are presented, corresponding pricing must also be presented.
iii. “To be determined” or an equivalent non-response must not be used.
iv. The Proposal may be evaluated more favorably in general if at least some Invited
Options are available.
v. The Lottery makes no commitment to any quantity or timing for acquisition of
Invited Options.
1.14. Mandatory Feature Requirements
A Mandatory feature is a feature that shall be included in any Proposal, the absence of
which may result in rejection of the Proposal as non-responsive and/or inadequate to the
Lottery’s needs. If a Vendor is unable to provide the item or service required, Vendor
may propose an alternative, which may or may not be accepted by Lottery. Likewise, a
Vendor may propose both a Mandatory Feature and one or more alternatives to the same
requirement, which alternative(s) may be considered by Lottery but again may or may not
be accepted.
1.15. Vendor Corporate Information
Vendors must provide the following general information in the Proposal:
A. The name and address of the Vendor submitting the Proposal.
B. Type of business entity (e.g., corporation, partnership, etc.).
C. Place of incorporation, or other form of organization, if applicable.
D. The name, address, telephone number, and email address of the Vendor's contact
regarding its corporate information.
E. The name, address, telephone number, and email address of the Vendor's contact
regarding its Technical Proposal.
F. The name, address, telephone number, and email address of the Vendor's contact
regarding its Price Proposal.
G. The name, address, telephone number, and email address of the Vendor's contact
regarding any Contract resulting from the RFP.
H. The locations of the major offices and other facilities that relate to the Vendor's
performance as proposed in its Proposal.
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I. The names, addresses, and functions of any and all Vendors, associated companies,
or consultants that will be involved in any phase of the project.
J. The name, address, telephone number, and email address (if available) of the
Vendor's accounting or auditing firm.
K. The name(s) of any and all law firms and/or individuals representing the Vendor
within the Lottery’s jurisdiction.
L. The names and addresses of all persons or entities who own over five percent (5%)
of the shares of the Vendor, and the names and addresses of all officers and
directors. If the Vendor is a subsidiary, the Vendor must disclose the information
required above on its parent and/or holding company.
M. Any substantial change of ownership in the Vendor or the parent and/or holding
company of the Vendor that occurred within the last year should be noted.
N. Any pending changes should be disclosed to the extent permitted by law and by
regulatory agencies.
1.16. Price Proposal
The Price Proposal shall contain all of the information required in pricing portion of the
RFP. A Price Proposal shall be complete. A Price Proposal that does not provide all
information requested may be rejected.
A. Base Price: The base price stated by the Vendor shall be for new, unused equipment.
Where proposed equipment is not new (although this is not preferred), the proposal
shall so indicate. The base price shall include all items and/or features required by
the RFP and proposed by the Vendor unless the Vendor specifically states that an
item or feature will be provided as a separately priced option.
B. Specified Options: The Vendor shall submit a price for providing Specified Options
as required by the RFP. The Lottery may select Specified Options at its sole
discretion.
C. Invited Options: The Vendor must submit prices for Invited Options included in the
Vendor’s proposal. The Vendor may propose a price for any other option not
specified in the RFP including, but not limited to, any other feature/function available
with its gaming system products and related services. The Lottery may select an
option at its sole discretion, which may be implemented at the discretion of the
Lottery over the Term of the Contract.
D. Offered Options: The Vendor may propose additional services, products, product
components, or features not required in Sections 4 and 5 (Technical Requirements);
i.e., Offered Options. If an additional service, product, product component, or feature
is proposed, it should be clearly marked as an OFFERED OPTION.
If the Vendor includes Offered Options in the Technical Proposal, then the Vendor
must also submit clear and distinct prices for Offered Options. Any item for which
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there is no additional fee (i.e., it is included in the base price) must be shown as No
Charge (N/C); see Pricing Information.
The Lottery reserves the right to waive the Vendor’s right to request additional
compensation for an Offered Option (if it is selected as the Successful Vendor and the
Lottery desires the Offered Option) for failure to specifically exclude an Offered
Option from the base price.
1.17. Modification/Withdrawal of a Proposal
A Vendor may modify or withdraw a Proposal by written notice prior to the closing date
and time for receipt of Proposals. The Lottery will not consider fax, email, or verbal
telephone requests to withdraw or modify a Proposal.
After the Proposal Submission date and time, a Proposal must not be modified, except to
the extent of a Vendor’s response to a request for clarification.
1.18. Evaluation of Proposals
After determining that a proposal satisfies the mandatory requirements stated in the
Request for Proposal, the evaluator(s) shall use subjective judgement in conducting a
comparative assessment of the proposal by considering each of the following criteria:
1. Specialized expertise, capabilities, and technical competence as demonstrated by the
proposed approach and methodology to meet the project requirements
2. Resources available to perform the work, including any specialized services, within
the specified time limits for the project
3. Record of past performance, including price and cost data from previous projects,
quality of work, ability to meet schedules, cost control, and contract administration
4. Availability to the project locale
5. Familiarity with the project locale
6. Proposed project management techniques
7. Ability and proven history in handling special project constraints
Each section of the RFP will be scored using the criteria above. Cost will be scored only
after all sections of the technical proposal have been scored. The weighting of each
section is as follows:
Online Central System
Section(s) Weight
4.2 Central Systems for Games Support 20
4.3 Retailer Terminal 15
4.4 Communications Network-Network Design 15
4.14 Software Control & Testing 7
4.6 Gaming Software Security & Control Features 7
4.10 Data Security Plan 5
4.15 Implementation 5
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4.8 Games and Marketing Support 5
4.9 Facilities 5
4.11 Support Staffing & Services; 4.12 Supply Warehousing
& Deliver; 4.13 Training
4
4.7 Internal Control System (ICS) 4
4.5 Software Applications and Files 3
Cost 5
Total On-line Score 100
Video Lottery Central System
Section(s) Weight
5.1 System Design 18
5.4 Operations 18
5.3 Overall Network & Communications 12
5.6 Reporting 12
5.2 Site Controllers 10
5.7 Conversion 8
5.8 Training 7
5.5 Interfaces 5
5.9 Acceptance Testing 5
Cost 5
Total Video Lottery Score 100
1.19. Rejection/Selection of Proposals
The Lottery may reject any or all Proposals or any portion thereof, advertise for new
Proposals, arrange to receive or itself perform and obtain the services and goods
requested in the RFP, abandon the need for such requested goods and services or award
in whole or in part a Contract deemed to be in the best interests of the Lottery.
Vendors will be held to the terms submitted in their Proposals but may be required to
reduce costs depending upon aspects of the proposed program that may be determined by
the Lottery to be unnecessary.
The Lottery will notify in writing those Vendors who submit a Proposal in response to
the RFP, but who are not awarded the Contract. The acceptance of a Proposal will not
diminish the Lottery's right to negotiate specific contract terms, including price, with the
apparent successful Vendor.
1.20. Acceptance Period
Proposals will remain valid and subject to acceptance by the Lottery for a period of 240
days from the Proposal due date of April 20, 2018. Failure to adhere to this requirement
may result in Proposal disqualification. Vendors will be strictly held to the terms in their
Proposals. The contents of the RFP and the Proposal will become contractual obligations
in the event of Contract Award.
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1.21. Multiple Proposals from a Single Vendor
Each Vendor may submit more than one (1) Proposal.
1.22. Late Proposals
Any proposals received after 4:00 p.m. CTZ on April 20, 2018, will be automatically
disqualified from further consideration.
1.23. Proposal Clarification Process
The Lottery reserves the right to request clarification or resolving ambiguities on
statements made by a Vendor in its Proposal at any point during the Proposal Evaluation.
All clarification will be requested in writing and will be sent to the contact person
representing the Vendor. Any such communication may be made by e-mail, fax, mail,
overnight courier or hand-delivered. Vendor will be given a specific deadline to submit a
response. The Vendor will make every effort to respond within the time frame indicated.
If it proves unfeasible, the Lottery and the Vendor may discuss modification of the
deadline.
The Vendor’s response must address only the information requested. It must be
submitted in writing, as directed by the Lottery. Any response should not address any
cost information unless it specifically addresses the clarification the Lottery is seeking.
The clarification process will not allow revision or supplementation of the Vendor’s
offering. Clarification is not a negotiating process.
1.24. RFP Clarification Questions
Written questions relevant to the RFP must be submitted to the Lottery by e-mail. The
first round of questions will be due no later than 4:00 p.m. CTZ on February 23, 2018.
The second round of questions will be due no later than 4:00 p.m. Central Time on March
16, 2018. All inquiries should be written in generic terms and contain no pricing
information. A copy of all written questions and the Lottery’s responses to these
questions will be provided to each Vendor. The Lottery will not identify the Vendor
posing the question. Answers to questions that materially impact the requirements of the
RFP will be formalized as amendments to the RFP and posted on the web site.
1.25. Amendments to RFP
If it becomes necessary to revise any part of this RFP for any reason, amendments will be
posted on the South Dakota Lottery's RFP webpage:
http://lottery.sd.gov/about/rfp/1160.aspx.
A copy of all amendments will also be provided either by fax, email, or by mail to all
interested Vendors. All Vendors must then verify in writing that they have received the
amendments. Amendments may result in postponing of deadline dates. The Lottery
reserves the right to cancel or to reissue the RFP, in whole or in part.
1.26. Bid Bond
The Vendor shall provide a Bid Bond guaranteeing the availability of the products and
services offered by the Vendor for a period of two-hundred-forty (240) days following
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the submission date of the vendor’s proposal. The Bid Bond in the amount of one million
dollars ($1,000,000) shall be made payable to the South Dakota Lottery. The Bid Bonds
for all vendors shall be returned two-hundred-forty (240) days after the submission of the
proposal or upon execution of a Contract with the successful Vendor, whichever occurs
first.
1.27. Litigation Bond
The purpose of the litigation bond is to discourage frivolous legal actions by permitting
the Lottery to recover damages resulting from a vendor initiating a frivolous lawsuit. A
claim upon the Litigation Bond may be made if all of the following are met:
A. The Vendor brings any legal action against The State of South Dakota, the Lottery,
any employee of the Lottery, or any consultant or employee of a consultant under
contract with the Lottery over the issuance of the RFP, the selection of the successful
Vendor, or execution of a Contract with the successful Vendor;
B. The State of South Dakota, the Lottery, or such other party is the prevailing party at
the conclusion of the legal action;
C. A court determines that the action or any portion thereof was frivolous or was brought
in bad faith, or was not brought upon reasonable grounds.
A litigation bond in the amount of Five Million Dollars ($5,000,000) shall be made
payable to the South Dakota Lottery and contain the conditions set out above. The
litigation bond shall be returned to the Vendor within 365 days of the signing of a
Contract with the successful Vendor, in return for a written statement from the Vendor
not to bring any legal action against the State of South Dakota, the Lottery, any employee
of the Lottery, or any consultant or employee of a consultant under contract with the
Lottery over the issuance of the RFP, the selection of the successful Vendor, or execution
of a Contract with the successful Vendor.
In lieu of a litigation bond, a Vendor may submit a written statement from the Vendor not
to bring any legal action against the State of South Dakota, the Lottery, any employee of
the Lottery, or any consultant or employee of a consultant under contract with the Lottery
over the issuance of the RFP, the selection of the successful Vendor, or execution of a
Contract with the successful Vendor.
1.28. Litigation and Investigations
Vendors must list and summarize, as part of their Technical Proposal, all pending
litigation, administrative or regulatory proceedings, or similar matters that may affect the
ability to produce and/or deliver the desired product or services. Vendors must also state
whether owners, officers, employees, primary partners or Vendors working on their
account have ever been convicted of a felony. Failure to disclose such matters may result
in rejection of the Proposal or in termination of any subsequent Contract.
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This is a continuing disclosure requirement; any such matter commencing after
submission of a Proposal and, with respect to the Successful Vendor after the execution
of a Contract, must be disclosed.
1.29. Release of Claims
With the submission of one or more proposals, each Vendor agrees that it shall not bring
any claim or have any cause of action against the Lottery or the State of South Dakota,
and all Lottery and State of South Dakota officers or employees, based on any
misunderstanding concerning the information provided herein or concerning the Lottery’s
failure, negligent or otherwise, to provide the Vendor with pertinent information as
intended by the RFP. Additionally, each Vendor releases each source of information of
all claims, whether known or unknown, consulted by the Lottery to obtain information
regarding the Vendor’s criminal history, credit data, the Vendor, the Vendor’s product,
services, personnel or subcontractors which the Lottery deems pertinent to this RFP.
1.30. Material and Non-Material Deviations
The Lottery reserves the right, at its sole discretion and subject to no penalty, to waive
minor administrative irregularities in Proposals, and to permit Vendors to correct non-
material errors or omissions in their Proposals.
The materiality of a deviation is at the sole discretion of the Lottery. A Proposal may be
rejected for a material deviation.
1.31. Certification Regarding Debarment, Suspension, Ineligibility and Voluntary
Exclusion- Lower Tier Covered Transactions
By signing and submitting this proposal, the Vendor certifies that neither it nor its
principals is presently debarred, suspended, proposed for debarment, declared ineligible,
or voluntarily excluded from participation, by any Federal department or agency, from
transactions involving the use of Federal funds. Where the Vendor is unable to certify to
any of the statements in this certification, the vendor shall attach an explanation to their
offer.
1.32. Disqualification for Business Incapability
Financial and business stability of the Vendor and wherewithal to perform and support
the Lottery are required.
If, at any time prior to the signing of a written Contract, the Lottery reasonably
determines that a Vendor does not possess adequate financial ability or requisite stability
to carry out the obligations of the Contract, that Vendor may be disqualified from further
consideration.
If, at any time after Contract execution, the Lottery reasonably determines that the
successful Vendor does not possess adequate financial ability or business stability to
continue to carry out the obligations of the Contract, the Contract may be terminated.
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1.33. Tested and Certified Equipment
The Vendor must submit proof with the Proposal that the proposed equipment has been
inspected for safety and approved by a reputable testing laboratory; for example,
Underwriter's Laboratories.
The Vendor must document that all proposed equipment is in compliance with FCC
regulations suitable for devices of the class proposed.
Certification under Canadian, European, or other International Standards that correspond
to the above is acceptable.
Alternatively, if the devices proposed are new, and not yet certified, the Vendor must
commit in the Proposal that it will submit a document showing certification as of the
Contract signing.
1.34. Independent Price Determination
By submission of a Proposal, the Vendor must certify – and in the case of a joint
Proposal, each party thereto must certify as to its own organization – that in connection
with the Proposal the prices in the Proposal have been arrived at independently, without
consultation, communication, or contract for the purpose of restricting competition as to
any matter relating to such prices with any other Vendor or with any competitor.
Unless otherwise required by law, the prices, which have been quoted in the Proposal
have not been knowingly disclosed by the Vendor and will not knowingly be disclosed by
the Vendor prior to Contract Award directly or indirectly to any other Vendor or to any
competitor. No attempt has been made or will be made by the Vendor to induce any other
person or entity to submit or not submit a Proposal for the purpose of restricting
competition.
1.35. Change of Ownership/Financial Condition
If a Vendor (including the parent or holding company of the Vendor) experiences a
substantial change in its ownership or financial condition after its Proposal has been
submitted and prior to the execution of the Contract with the successful Vendor, the
Vendor must notify the Issuing Office in writing at the time the change occurs or is
identified.
A “substantial change” in ownership or financial condition is defined as an event which
following generally accepted accounting principles, would require a notation in the
Annual Report of a publicly traded United States or Canadian corporation, or equivalent
standard.
Failure to notify the Issuing Office of such a substantial change may result in the
disqualification of the Vendor.
1.36. News Releases
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News releases pertaining to the RFP or the services, study, data, or project to which it
relates must not be made without prior written Lottery approval, and then only in
accordance with explicit written instructions from the Lottery.
The results of the RFP process must not be released without prior approval of the Lottery,
and then only to designated persons and/or media organizations.
1.37. Hiring of Lottery Staff
During the period from RFP Publication until Contract Award, Vendors must not make
any employment offer (officially or unofficially) or propose any business arrangement
whatsoever to any Lottery employee.
A Vendor making such an offer or proposition may be disqualified from further
consideration, or the Contract signed pursuant to the RFP may be terminated.
These conditions should continue for the successful Vendor for a period of one (1) year
following the Contract Award.
1.38. Information from Other Sources
The Lottery reserves the right to obtain information from outsides sources concerning a
Vendor.
1.39. Demonstrability and Field Experience of Proposed System
The Lottery requires that all equipment, software, and manufacturing capabilities
proposed by the Vendor, at a minimum, be capable of a demonstration that indicates the
Vendor's ability to meet the Lottery's requirements.
While functions and features demonstrated or benchmarked at the request of the Lottery
need not be identical to those of the RFP, common functionality and operations are
expected.
A Vendor submitting a Proposal must be able to provide a site(s) to demonstrate its
proposed system and its ability to meet the requirements of the RFP.
Failure to propose demonstrable products may subject the Vendor's Proposal to rejection.
If requested, demonstrations may consist of any or all of the following: a simulation at
Lottery headquarters or the Vendor's facilities; the observation of operations at another
lottery; or a presentation at some other appropriate venue.
The Lottery may require field experience. Field experience means that a version of the
lottery gaming system software forming the core of the proposed system has been placed
into production and is being deployed at other lottery site(s) at the time of the Proposal.
It is not required that every software and hardware item in the proposed configuration
already be operational in some lottery setting; however, the Lottery does not intend to
acquire configuration items which are at the specifications or concept stage only, early in
development, or announced but not ready for delivery.
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1.40. Transmittal Letter
All vendors shall respond to the following statements:
(a) the vendor is the prime contractor and identifying all subcontractors;
(b) the vendor is a corporation or other legal entity;
(c) no attempt has been made or will be made to induce any other person or firm to
submit or not to submit a proposal;
(d) the vendor does not discriminate in employment practices with regard to race, color,
religion, age (except as provided by law), sex, marital status, political affiliation, national
origin or disability;
(e) no cost or pricing information has been included in the transmittal letter or the
Technical Proposal;
(f) the vendor presently has no interest, direct or indirect, which would conflict with the
performance of services under the Contract and shall not employ, in the performance of
the Contract, any person having a conflict;
(g) the person signing the proposal is authorized to make decisions as to pricing quoted
and has not participated, and will not participate, in any action contrary to the above
statements;
(h) whether there is a reasonable probability that the vendor is or will be associated with
any parent, affiliate or subsidiary organization, either formally or informally, in supplying
any service or furnishing any supplies or equipment to the vendor which would relate to
the performance of the Contract. If the statement is in the affirmative, the vendor is
required to submit with the proposal, written certification and authorization from the
parent, affiliate or subsidiary organization granting the State and/or the federal
government the right to examine any directly pertinent books, documents, papers and
records involving such transactions related to the contract. Further, if at any time after a
proposal is submitted, such an association arises, the vendor will obtain a similar
certification and authorization and failure to do so will constitute grounds for termination
for cause of the contract at the option of the Lottery;
(i) vendor agrees that any lost or reduced federal matching money resulting from
unacceptable performance in a contractor task or responsibility defined in the RFP,
contract or modification shall be accompanied by reductions in state payments to Vendor;
(j) the vendor has not been retained, nor has it retained a person to solicit or secure a state
contract on an agreement or understanding for a commission, percentage, brokerage or
contingent fee, except for retention of bona fide employees or bona fide established
commercial selling agencies maintained by the vendor for the purpose of securing
business; and
(k) vendor has or will obtain a South Dakota sales tax license prior to any contract award.
For breach of this provision, the Lottery shall have the right to reject the proposal,
terminate the contract for cause and/or deduct from the contract price or otherwise
recover the full amount of such commission, percentage, brokerage or contingent fee or
other benefit.
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1.41. Vendor Information
The vendor must include a narrative of the vendor's corporation and each subcontractor if
any. The narrative shall include the following:
(a) date established;
(b) ownership (public, partnership, subsidiary, etc.);
(c) number of personnel, full and part time, assigned to this project by function and job
title;
(d) resources assigned to this project and the extent they are dedicated to other matters;
(e) organizational chart;
(f) financial statement may be required; and
(g) company history.
1.42. Qualifications
A description of the vendor's qualifications and experience providing the requested or
similar service shall be submitted with the Technical Proposal. All previous services
rendered that are submitted as qualifications must have been successfully implemented
and not been simply limited to design or proposal stages. The vendor must be an
established firm recognized for its capacity to perform. The vendor must have sufficient
personnel to meet the deadlines specified in the bid event.
1.43. Experience
All vendors are preferred to have a minimum of five years continuous active participation
in the applicable industry, providing equipment/services comparable in size and
complexity to those specified herein. Vendors may be required to furnish information
supporting the capability to comply with conditions for bidding and fulfill the contract if
receiving an award of contract. Such information may include, but not be limited to, a
list of similar size and type projects the Vendor has completed within the United States
and outside the United States.
1.44. Timeline
A timeline for implementing services must be submitted with the bid.
1.45. Methodology
Vendors shall submit with the bid, a detailed explanation of the methodology for
implementing services.
1.46. References
Provide three (3) references who have purchased similar items or services from the
vendor in the last two (2) year(s). References shall show firm name, contact person,
address, e-mail address and phone number. Vendor's employees and the buying agency
shall not be shown as references.
1.47. Alternate Proposals/Equivalent Items
Bids on goods and services comparable to those specified herein are invited. Whenever a
material, article or piece of equipment is identified in the specifications by reference to a
manufacturer's or Vendor's name, trade name, catalog number, etc., it is intended to
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establish a standard, unless otherwise specifically stated. Any material, article or
equipment of other manufacturers or Vendors shall perform to the standard of the item
specified. Equivalent bids must be accompanied by sufficient descriptive literature
and/or specifications to provide for detailed comparison. Samples of items, if required,
shall be furnished at no expense to the Lottery and if not destroyed in the evaluation
process, shall be returned at vendor's expense, if requested.
1.48. Technical Literature
All Technical Proposals shall include specifications and technical literature sufficient to
allow the Lottery to determine that the equipment/services meet(s) all requirements. If a
requirement is not addressed in the technical literature, it must be supported by additional
documentation and included with the bid. Proposals without sufficient technical
documentation may be rejected.
1.49. Upgrades
Vendors shall indicate the upgrade price and policy for any software, firmware, or
hardware upgrades anticipated for the equipment bid. If the upgrades are provided
without cost, this should be indicated.
1.50. Equipment
All proposed equipment, equipment options, and hardware expansions must be identified
by manufacturer and model number and descriptive literature of such equipment must be
submitted with the bid.
1.51. Site Visit
If site visits are conducted, they will be scheduled following the submission of the
proposal. Site visits will be made at the Vendor’s expense.
1.52. Presentation/Demonstrations
Any presentation or demonstration by a Vendor to clarify a proposal may be required at
the sole discretion of the Lottery. However, the Lottery may award a contract based on
the initial proposals received without a presentation or demonstration by the Vendor. If
presentations and or demonstrations are required, they will be scheduled after the
submission of proposals. Presentations and demonstrations will be made at the Vendor’s
expense.
1.53. Negotiations
This process is a Request for Proposal/Competitive Negotiation process. Each proposal
shall be evaluated, and each respondent shall be available for negotiation meetings at the
Lottery’s request. The Lottery reserves the right to negotiate on any and/or all
components of every proposal submitted. From the time the proposals are submitted until
the formal award of a contract, each proposal is considered a working document and as
such, will be kept confidential. The negotiation discussions will also be held as
confidential until such time as the award is completed.
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1.54. Procurement Schedules
The estimated procurement schedules are as listed below. Dates are subject to changes.
These schedules pertain to the central systems only. Any related services contracted
independent of a central system shall be subject to a negotiated schedule.
Online Central System Procurement Schedule
EVENT DATE YEAR
Publish RFP January 31 2018
Vendors Submit Questions February 23 2018
Lottery Responds to Questions March 9 2018
Vendors Submit 2nd Round of Questions March 16 2018
Lottery Responds to 2nd Round of Questions March 30 2018
Proposals Submission Deadline April 20 2018
Evaluate Proposals-including demonstrations and site visits May-August 2018
South Dakota Lottery Commission Approval-notification to
vendors
September 1 2018
Complete Retailer Transition-End of Current Contract August 2 2019
Complete Transition-Go Live-New System On Line August 3 2019
Video Lottery Central System Procurement Schedule
EVENT DATE YEAR
Publish RFP January 31 2018
Vendors Submit Questions February 23 2018
Lottery Responds to Questions March 9 2018
Vendors Submit 2nd Round of Questions March 16 2018
Lottery Responds to 2nd Round of Questions March 30 2018
Proposals Submission Deadline April 20 2018
Evaluate Proposals-including demonstrations and site visits May-August 2018
South Dakota Lottery Commission Approval-notification to
vendors
September 1 2018
Complete Establishment Transition-End of Current Contract November 16 2019
Complete Transition-Go Live-New System On Line November 17 2019
The Lottery reserves the right to amend this schedule as necessary.
2. Lottery Background
2.1. Glossary
Glossary of some key terms used within this Request for Proposals (RFP). This list
is not exhaustive of all terms used within this RFP:
Ad Hoc Reports – Reports generated, as needed, as opposed to on a production
schedule.
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Backup 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 Lottery’s Gaming System, the BDC is the real-time functional
duplicate of the Primary Data Center (PDC). It shall be geographically separate from
the PDC to prevent a disaster from affecting both centers at the same time.
Backup System – The Backup/redundant environment that comprises the components of
the System, taken as a single physical and/or logical group, that are designated as
being redundant to the Primary System. The Backup System is primarily responsible
for the accurate processing of a transaction in a secure manner if the Primary System
is not functional.
Bar Code – The symbol on a Instant Ticket, On-Line Ticket, Video Lottery ticket, coupon,
or other item which is used to uniquely identify each ticket or item. A code consisting of
a group of printed and variously patterned bars and spaces and sometimes numerals that
are designed to be scanned and read into computer memory as identification for the
object it labels. The most common symbologies used in the retail environment are UPC-
A for merchandise marking and Code 128 for shipping containers. Other symbologies
include Plessey Code 39, Interleaved 2 of 5 and EAN/JAN, PDF 417.
Central Site – The location of the Vendor’s central computer that, together with
associated support equipment, will be used to support the Draw Game operations and
Instant Ticket Management or Instant pass-through.
Claim Number – The unique serial number assigned by the System to a transaction,
receipt or ticket.
Commission – The South Dakota Lottery Commission.
Communications Network – A statewide data transport facility and Retailer premise
wiring required to connect equipment in the Retailer locations to the Primary, Backup
and ICS Sites. May include any data transport to allow proper communication for the
Video Lottery System.
Connectivity – A system’s or device’s ability to link with other systems or devices,
including third party systems or devices.
Consumables – Play slips, play slip holders, ticket stock, printer paper, and any other
operational supplies. The term "Consumables" does not include point of sale
promotional items or Scratch-Off
Contract – The Contract entered into between the Lottery and the selected Vendor
responding to this RFP. The Contract shall incorporate by reference the following: all
State mandatory contractual provisions; the entire RFP, including any
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addenda/amendments; all or indicated portions of the selected Vendor’s Proposal;
and, any other provisions as indicated in the Contract.
Customer Display – Hardware attachment to a Retailer Terminal for the display of
Jackpot amounts and other information as designated by the Lottery.
DES – Data Encryption Standard of the United States Department of Defense which is a
widely used method of data encryption using a private (secret) key.
Director – The Executive Director of the South Dakota Lottery, or his or her designee.
Draw Game – A Lottery game sold and redeemed through a computer network at
Retailer locations; and whose Tickets are generated by a Terminal and are a record of
a transaction for a Draw Game.
Draw Game Ticket – A hard-copy bearer instrument that is a player’s record of a wager
transaction for a Draw Game.
Drawing – The selection of winning numbers, to include live Drawings as well as
Drawings conducted via random number generation.
Encryption – The process of transforming information to make it unreadable to anyone
except those possessing special knowledge that meets or exceeds the requirements of
encryption and encryption key management used by the United States government as
certified by the National Institute of Standards and Technology (NIST), and that has
not yet been broken or compromised. For the purpose of this RFP encryption shall
meet the South Dakota Bureau of Information and Telecommunications encryption
standards.
Equipment – All of the machines and devices used to transport, process and display
Lottery information (see also Hardware).
Establishment – A licensed location for Video Lottery Terminals. A maximum of 10
VLTs are permitted to be in a single establishment.
Facilities – The locations required to provide and support the Retailer network, including
data centers, warehouses, repair depots, and any others designated by the Lottery.
File – A related collection of records containing a consistent set of data fields that
describe an entity. A file can be processed by software representing an authorized
user to add, modify or delete records, or to generate a report or display of useful
information. A file can be operated on as an object itself, for example to move it
from one location to another, or to delete it.
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Gross Gaming Revenue (GGR) – defined as the amount wagered less the amount paid
out to players as winnings, will be trued up on an annual basis to the ‘net game
revenues’ and ‘game prizes expense’ from the Lottery’s audited financial statements.
Hardware – All State-of-the-Art computer equipment to be provided by the Vendor,
including all associated central computers, terminals, control channels, monitoring
equipment, communications equipment and peripheral equipment.
Information Technology Infrastructure Library – ITIL, formerly an acronym for
Information Technology Infrastructure Library, is a set of practices for IT service
management (ITSM) that focuses on aligning IT services with the needs of business.
Instant Game – A game in which tickets have a concealed prize structure and playing
area. The player removes the material concealing the playing area on the game ticket
(e.g. latex coating or flap) in accordance with the game instructions. Includes Scratch
or Scratch-Off Games, Electronic Games, or any game wherein the player receives an
immediate result without waiting for a Drawing.
Instant Ticket – The ticket purchased for participation in an Instant Game, which
includes Scratch or Scratch-Off Ticket, and Electronic Games.
Internal Control System (ICS) – A system of accounting and data processing controls
that allows the Lottery to balance Terminal transactions to Vendor data and trace
problems as necessary.
Issuing Office – South Dakota Lottery.
Lottery – The South Dakota Lottery, including (as applicable) the South Dakota Lottery
Commissioners, and all South Dakota Lottery employees.
Lottery Games – This includes all of the Draw Game and Instant Game operations
which enables the Lottery to sell, validate and redeem Draw Game and Instant
Tickets.
Management Terminal – An On-Line Terminal located at a Lottery office that is used to
validate winning tickets not redeemed at Retailer locations and to produce Terminal
reports for all Retailer or chain accounts.
Multi-State Lottery Association (MUSL) – A non-profit, government-benefit
association owned and operated by its member lotteries. Each MUSL member offers
one or more of the games administered by MUSL. All profits are retained by the
individual lotteries and are used to fund projects approved by the legislature
authorizing each lottery.
NASPL – The North American Association of State and Provincial Lotteries.
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Net Income – Net Sales less expenses (both gaming and operational) incurred by the
Lottery.
Net Machine Income – Money put into a Video Lottery Machine less credits paid out in
cash.
Net Sales – Equal to all On-Line Tickets sold during the period. (Free replays as prizes,
promotional free tickets or cancelled transactions are not considered a ticket sold).
On-Line Central System (On-Line System) – The computer system, both hardware and
software, office, terminals, Equipment, parts, supplies, commodities, personnel and services
necessary to implement, conduct and provide the Vendor-provided On-Line Related
Products and Services for State Lottery Games. This includes all of the On-Line and Instant
Game operations which enables the Lottery to sell and redeem On-Line Tickets, and
validates Instant Tickets.
On-Line Terminal (or Retailer Terminal) – Terminal installed at a Retailer’s location: a)
for the purpose of selling and redeeming On-Line Tickets, validating Instant Tickets and
performing Pack Management and accounting functions; b) that allows connection to the
System either directly or indirectly; and c) that prints reports.
Operational Sales Period – The specific daily hours designated by the Lottery during
which Retailers can sell, cancel, validate, deliver, activate, settle, return, transfer, and
perform other operations on Retailer Terminals.
Operator – An individual or organization that owns and operates Video Lottery
Terminals. They contract with, or are themselves, establishment owners.
Pack – A pack of instant game tickets, with individual tickets uniquely numbered by
virtue of game/pack/ticket identifiers. Packs contain varying numbers of tickets,
depending on the game.
Pari-mutuel – A prize payout method in which an available prize pool is split equally
between the number of winning entries entitled to claim it. For example, in a Lotto
game, if three players hold the winning combination for a specific drawing, the grand
prize would be split in three equal portions, one portion going to each player.
Personally Identifiable Information (PII) – Any data that could potentially identify a
specific individual. Any information that can be used to distinguish one person from
another and can be used for de-anonymizing anonymous data can be considered PII
Play – A single set of numbers for a Lottery Drawing. A ticket may contain multiple
plays, depending on the game.
Player or Customer Transaction Display – Player-oriented visual display that
communicates to the player the amount of the current sale and Lottery-designated
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messages regarding the winning or non-winning status of a ticket scanned on the
terminal. One or more Lottery-designated advertising messages shall be displayed
when not displaying player transaction information.
Player Activated Terminal (PAT)/ Instant Ticket Vending Maching (ITVM) – A
customer-operated On-Line Terminal that sells On-Line and/or Instant Tickets. PATs are
for placement in high-traffic Retailer locations; designed for use by the player directly;
contain a currency acceptor for payment; dispense tickets of variable lengths; and provide
connectivity to the System to record the sale of tickets at the time of purchase and to
track paper inventory in the machine.
Point of Sale (POS) – Depending on context: (a) the location where a product is
purchased; (b) the device with which a Retailer records a sale and collects money; (c)
promotional, advertising or display pieces (e.g., stickers and signs) or updateable
wireless message signs that are placed where a product is sold used to increase public
awareness of Lottery products and services in order to increase sales.
Primary Business Site (PBS) – The PBS is a business office location where the primary
functions are the “day-to-day” business activities, marketing and sales offices, and
customer training.
Primary System or Primary Data Center (PDC) – The components of the 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.
Privileged Terminal – A terminal similar to a retailer sales terminal, with specified
functions disabled such as ability to create "new wager" transactions disabled.
Proposal – The response by a Vendor 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 a Vendor’s price and terms for the proposed contract, a description of
technical expertise, work experience, and other information as requested in the
solicitation.
Quick Pick – A function that allows the System to automatically and randomly select
player's wager numbers or symbols.
Random – To have no discernible pattern under any type of testing. No characteristic or
set of characteristics or prior elements or a set of values or sequence of values shall
allow prediction of the next value.
Report – Information produced by the System that is viewed via display, printed, or
saved to a file depending on the needs of the Lottery.
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Retailer – A business entity or retailer that is authorized by the Lottery to sell Lottery
products.
RFP – This Request for Proposals for a Lottery Gaming System, including any
addenda/amendments thereto.
Scheduled or “Scheduled” Reports – Routine daily, weekly, or other periodic reports
prepared by the Vendor per Lottery specifications regarding any aspect or function of
the lottery gaming system or communications systems.
Settlement – The act of billing the Retailer, in the System, for Instant Tickets for which
it is liable but has not yet paid.
Software – Means System, Retailer Terminal, Management Terminal and Player
Activated Terminal machine software, firmware, programs, subroutines, source code
instructions, all documentation relating to these items and any other descriptive
materials or related items that may be required to enable the gaming system to
perform their functions.
South Dakota Office of Procurement – the division in charge of purchases located
within the South Dakota Bureau of Administration.
Start-up – The date and time that live gaming operations commence under the Contract
resulting from this solicitation.
State – The State of South Dakota.
State-of-the-Art – The most current technology. The Lottery shall have the sole right to
determine if the Equipment and System proposed in response to this RFP are state-of-
the-art at the time the Proposal is received.
Sub-Vendor – any person or firm having an agreement with a Vendor to perform all or
some of the Vendor’s work under a contract with a procurement agency. Sub-Vendor
does not include an employee with an employment contract, or an employee
organization with a collective bargaining agreement.
TCP/IP – Transmission Control Protocol/Internet Protocol, according to MIL-STD-1777
and MIL-STD-1778.
Terminal – A computerized unit specifically designed for issuing and processing tickets
and for printing of special reports. Includes the following types of Terminals:
Management – A Terminal located at a Lottery office that is used to validate
winning tickets not redeemed at Retailer locations and to produce Terminal
reports for all Retailer or chain accounts.
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Retailer Terminal – Any device installed at the retailer location that
communicates with the Lottery Gaming System for the purpose of selling
Lottery Games, validating Lottery Games or communicating winning, non-
winning and prize amount data, including references to Retailer Terminal.
Other – Any other Terminal used for retail sales that performs some but not all
of the functions of a Retailer Terminal. (For example, a hand-held portable
Terminal capable of selling only Quick Picks for Draw Games, countertop
self-service Terminals that read vouchers and Play Slips or small footprint
self-service Terminals that sell Draw and Monitor Games and Instant Ticket
Games).
Transaction – All game activity that shall be processed by the Central Site System(s).
Transactions include but are not limited to wagers, cancels, validations, rejections,
deliveries, activations, settlements, returns, transfers, reports, sign-ons and sign-offs.
Validation – Process by which winning tickets, both Draw Games and Instant, are
checked against computer files to ensure that the ticket presented is valid and that it
has not been redeemed previously.
Video Lottery Central System (Video Lottery System) – The computer system, both
hardware and software, office, equipment, parts, supplies, commodities, personnel and
services necessary to implement, monitor, and manage the State Video Lottery program.
VLT– Any type of Video Lottery Terminal.
2.2. General Information for On-line Central System
2.2.1. Current System
The Lottery’s current On-line Central System is operated by International Game
Technology (IGT), the current ICS is developed by Elsym, and the Lottery
maintained ACCLAIMS System provides Instant ticket management, Instant ticket
auto-order processing, financial management, accounts receivable, retailer
management, and claims processing.
2.2.2. Current Draw Games
The Lottery currently conducts five (5) draw games, as follows:
A. Powerball- A multi-state game, played in 43 states, the District of Columbia,
Puerto Rico, and the Virgin Islands. Drawings occur on Wednesdays and
Saturdays.
B. Mega Millions- A multi-state game, played in 44 states, the District of
Columbia, and the Virgin Islands. Drawings occur on Tuesdays and Fridays.
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C. Lucky for Life- A multi-state game, played in 22 states. Drawings occur on
Mondays and Thursdays.
D. Lotto America- A multi-state game, played in 13 states. Drawings occur on
Wednesdays and Saturdays.
E. Dakota Cash- A game played only in South Dakota. Drawings occur on
Wednesday and Saturdays.
2.2.3. Instant/Scratch Games
The South Dakota Lottery launches, on average, around 30 scratch games a year.
Current scratch price point offerings are $1, $2, $3, $5, $10, and $20.
2.2.4. Retailers
There are approximately 620 retailers. Of these, 12 are instant ticket-only retailers.
All retailers, including instant-only retailers, currently all use the same retailer
terminal.
2.2.5. Back-Office Systems
The South Dakota Lottery's Back Office System is located at two different BIT data
centers in Pierre, SD. The system consists of two IBM i-Series servers using
Anderson Consulting's Acclaims software, using a DB2 database, and user
applications written in RPG III and IV. This system is used for Instant (scratch)
tickets live transaction interface, sales, auto reorders processing, inventory control,
marketing and accounting, and other daily scratch ticket business functions. Daily
and weekly Accounting information is transferred to the State Accounting system
and to the State’s primary Bank. It provides a connection to an in house mobile app
for ticket verification and provides real time data to an in house Lottery Retailer
website. The system runs on an AS/400 platform with one server as the primary and
a second server as the Secondary/ test/development server. A dual transaction
software is used to write a copy of the Primary system transactions to the Secondary
system. In addition to Instant activity, the Acclaims software provides On Line
ticket pay authorizations, creates On-Line warrants, and processes daily sales totals
from the Vendor Online Gaming system. The Lottery users connect to the State of
South Dakota LAN/WAN using Windows 7 (Note: the Lottery intends to switch to
Windows 10 for all office desktop computers prior to projected contract start date.).
The Lottery's current gaming Internal Control System (ICS) and database are at the
Lottery headquarters building in Pierre, South Dakota. ICS applications run on a
Windows Server 2003 platform on a IBM 7977 server. The Lottery currently
operates three servers, a primary, a secondary, and a test server.
The ICS is used for on line sales verification and prize verification control.
2.2.6. Jurisdictional Game Groups
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The South Dakota Lottery is a member of the Multi-State Lottery Association
(MUSL).
2.2.7. Marketing and Related Services
The South Dakota Lottery currently contracts with Lawrence & Schiller of Sioux
Falls, South Dakota for a wide variety of marketing services, including advertising,
media buying and some public relations assistance. The Lottery currently contracts
with Scientific Games International and Pollard Bank Note Ltd. for instant ticket
printing and related marketing and assistance.
The Lottery currently participates in, and sells at two special events each year, the
Black Hills Stock Show in Rapid City, South Dakota and the South Dakota State
Fair in Huron, South Dakota.
2.3. General Information for Video Lottery Central System
2.3.1. Current System
The Lottery’s current Video Lottery Central System is developed and maintained by
Scientific Games. The Primary Data Center is located in the Becker-Hansen
Building in Pierre, SD. The Backup Data Center is located in Alpharetta, Georgia.
2.3.2. Operations
South Dakota’s Video Lottery program is a joint venture between the State and
private Operators. The Operators own and maintain the Video Lottery Terminals
(VLTs) while the State operates the Central System for control and monitoring.
There are currently just over 9,000 active VLTs in approximately 1,345
establishments. Each establishment is allowed to have up to 10 VLTs. All VLTs are
linked to the Central System in Pierre, SD that collects and accounts for all play
transactions via dial-up modem on a daily basis. With the approval of the Lottery
Commission, video lottery machines offer various combinations of games, including
poker, black jack, keno, bingo, and line games. Players may wager from 1 cent up to
a maximum of $2.00 per game. The maximum amount that can be won per game is
$1,000. VLTs currently use VLCS- Version D and SAS protocols, and they are
monitored through the use of DX Site Controllers and Multi-drop Connectivity
Devices. There are currently four Video Lottery license types: Establishment,
Operator, Distributor, and Manufacturer. The Operator license is the only one that is
billed through the Central System. The Lottery operates on a twice monthly billing
cycle for Video Lottery Operators.
3. Terms and Conditions
3.1. Contract Terms and Priority of Contract Documents
3.1.1. Terms and Conditions and Priority of Documents
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The terms and conditions of the contract between the Lottery and the Vendor consist
of and precedence is established by the order of the following documents:
1) Contract as executed by the parties, including negotiated modifications and
clarifications to the RFP and the Vendor’s Proposal submitted in response to the
RFP as set forth herein;
2) Vendor’s Proposal; and
3) the RFP, as amended by all addenda thereto and all written answers provided by
the Lottery on March 9, 2018 and March 30, 2018 respectively.
The above numbered documents are, collectively, the “Contract”. These documents
are complementary and what is required by one shall be binding as if required by
all. In the case of any conflict or inconsistency arising under the Contract
documents, a document identified with a lower number in this section shall
supersede a higher numbered document to the extent necessary to resolve any such
conflict or inconsistency. No conflict or inconsistency shall be deemed to occur in
the event an issue is addressed in one of the above mentioned Contract documents
but is not addressed in another of such documents. No conflict or inconsistency
shall be deemed to occur in the event an issue addressed in one of the above-
mentioned Contract documents is an additional or supplemental requirement to an
issue addressed in another of such documents.
3.1.2. Right to Memorialize Final Agreement
The Lottery reserves the right to determine the form of the final contract. At its
option, the Lottery may memorialize the agreement between the Lottery and the
Vendor in one or more final contract documents.
3.2. Governing Law
The Contract shall be governed by the laws of the State of South Dakota and shall be
deemed executed in Pierre, Hughes County, South Dakota.
3.3. Jurisdiction
The parties shall bring any and all legal proceedings arising hereunder in the State of
South Dakota Circuit Court of Hughes County, unless otherwise specified and agreed
upon by the State of South Dakota. Vendor waives personal service of process, all
defenses of lack of personal jurisdiction and forum non conveniens. The Eleventh
Amendment of the United States Constitution is an inherent and incumbent protection
with the State of South Dakota and need not be reserved, but prudence requires the State
to reiterate that nothing related to this Agreement shall be deemed a waiver of the
Eleventh Amendment.
3.4. Term
The On-line Central System Contract will be for an initial term beginning approximately
August 3, 2019 and run through August 2, 2026. The Contract may be extended at the
option of the Lottery for additional periods not to exceed a total Contract term of fifteen
(15) years. The Lottery will notify Vendor in writing of its intent to extend the Contract
not later than ninety (90) days before the end of the current Contract period.
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The Video Lottery Central System Contract will be for an initial term beginning
approximately November 16, 2019 and run through November 17, 2026. The Contract
may be extended at the option of the Lottery for additional periods not to exceed a total
Contract term of fifteen (15) years. The Lottery will notify Vendor in writing of its intent
to extend the Contract not later than ninety (90) days before the end of the current
Contract period.
3.5. Terms of Payment
3.5.1. Fixed Pricing and Payment
As full and complete compensation for all work performed for the Lottery under the
Contract, the Lottery shall pay the Vendor the expenses, charges and costs, as
ultimately determined in accordance with Part 7, Pricing, the successful Vendor’s
proposal and any negotiations thereafter memorialized. The Vendor’s Price
Proposal may be modified from time to time pursuant to the provisions of section
3.61, Amendment. The Lottery shall not be liable for any expenses the Vendor
pays or incurs or any charges or costs billed to the Lottery under the Contract unless
set forth in the Contract. Except as set forth in the Contract, the Vendor shall
supply, at its sole expense, all staff, equipment, tools, materials or supplies to
accomplish the work to be performed pursuant to the Contract.
3.5.2. Payment Remedies
The Lottery’s payment of expenses, charges and costs is subject to all remedies
afforded to the Lottery under law and pursuant to the provisions of section 3.25,
Remedies.
3.6. BIT Standard Contract Terms and Conditions
Any contract or agreement resulting from this RFP will include the State’s standard I/T
contract terms listed in Appendix A, along with any additional contract terms as
negotiated by the parties. As part of the negotiation process the contract terms listed in
Appendix A may be altered or deleted. The Vendor should indicate in their response any
issues they have with specific contract terms if the Vendor does not indicate that there are
any issues with any contract terms then the State will assume those terms are acceptable
to the Vendor. There is also a list of technical questions, Security and Vendor Questions
which is attached as Appendix B. These questions must be answered and may be used in
the proposal evaluation.
3.7. Warranties
3.7.1. Vendor Warranties
For the term of the Contract, all extensions, and for a period of one (1) year following the
termination or expiration of the Contract, the Vendor warrants that:
A. The design, development, quality and execution of all deliverables to be
provided under the terms of this contract are fully and fairly consistent with the
representations stated in the Vendor’s Proposal, as that Proposal may be
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supplemented or amended in compliance with all applicable procurement or
contract requirements;
B. The games provided under this Contract, must in all respects conform to, and
function in accordance with, the approved game specifications and designs.
Without limiting the generality of the foregoing, the Vendor specifically
warrants that the on-line gaming system will permit the generation of tickets only
pursuant to, and in accordance with, legitimate plays from authorized terminals,
that the on-line gaming system will authorize payment only on legitimate
winning tickets, if a game design so provides, that the on-line gaming system
will correctly and consistently limit plays on any given number or numbers and
that prize payments on tickets that are printed as winning tickets on their face
must be uniformly consistent with the approved prize structure.
C. The on-line game tickets and all information technology equipment and
hardware associated with the on-line gaming system to be delivered pursuant to
this Contract are required for the particular purpose of issuance, distribution and
sale to the public in a Lottery program supervised by the Lottery. The Vendor
acknowledges that the Lottery is relying on the Vendor’s skill and judgment to
furnish on-line gaming system equipment and hardware that is fit, in all respects,
for that purpose. The Vendor warrants that the on-line game tickets and on-line
gaming system equipment and hardware will be fit for such purpose.
D. Any Software used pursuant to this Contract that is created to meet the
requirements of the Lottery for the on-line gaming system or to perform the
Contract and all modifications to Software to meet the requirements of the
Lottery or to perform the Contract (collectively, “Customized Software”) is fit
for the particular purpose for which the Customized Software is created or
modified and the Customized Software will operate and perform in accordance
with the functions and Specifications set forth in the Contract. The Lottery
hereby notifies the Vendor that the Lottery is relying upon the Vendor’s skill and
judgment to create and modify suitable Customized Software for the Lottery’s
particular purpose.
E. Any Software developed by or owned by the Vendor prior to the award of the
Contract and used to perform the Contract (“Proprietary Software”) and any
Software developed or owned by the Vendor’s Subcontractors and used to
perform the Contract (“Subcontractor Proprietary Software”) is fit for the
particular purpose for which it is used under the Contract (operation and
maintenance of on-line gaming system) and the Proprietary Software and
Subcontractor Proprietary Software will operate and perform in accordance with
the functions and Specifications set forth in the Contract. The Lottery hereby
notifies the Vendor that the Lottery is relying upon the Vendor’s skill and
judgment to select and furnish suitable Proprietary Software and Subcontractor
Proprietary Software for the Lottery’s particular purpose.
F. Any commercial off-the-shelf Software acquired from a third party and used
without modification to perform the Contract (“Commercial Software”) is
merchantable.
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G. All Software used to perform the Contract is not incompatible with the Software
and hardware currently used by the Lottery and more particularly described in
the RFP or with any Software or hardware used or required by the Vendor or its
Subcontractors to perform the Contract. “Incompatibility” shall include, but is
not limited to: the creation of errors in data; the loss of data; the inability to
access data or to perform work under the Contract; and delays and stoppages in
the performance of work under the Contract.
3.7.2. Warranty Work
Vendor shall repair or replace, within a commercially reasonable time and at its sole cost
and expense, all equipment, hardware and software failing to comply with the warranties
granted in this section. If the Vendor fails to repair or replace such equipment, hardware or
software within a commercially reasonable time, the Lottery may, in its sole discretion, act
to repair or replace the faulty equipment, hardware or Software and the Vendor shall
reimburse the Lottery for all costs incurred by the Lottery to repair or replace the same.
3.7.3. Manufacturer’s Warranties
The Vendor shall ensure that the manufacturer’s warranty for Commercial Software is
given directly to the Lottery by the manufacturer or is assigned to the Lottery in accordance
with the requirements of the manufacturer.
3.8. Software Licensing and Ownership
3.8.1. Customized Software
The Lottery shall have all ownership rights in all Customized Software and associated
documentation.
3.8.2. Proprietary Software
Vendor grants the Lottery a perpetual, nontransferable, and non-exclusive license to use,
maintain and enhance all Proprietary Software and related documentation. The Lottery's
license includes the right to all updates, upgrades, or other enhancements produced by or
for the Vendor. The payments paid by the Lottery, as ultimately determined in accordance
with Part 7, Pricing, the successful Vendor’s proposal and any negotiations thereafter
memorialized shall be the sole source of payment for the cost of such updates, upgrades, or
other enhancements during the term of the Contract. The Vendor may charge a
commercially reasonable additional license fee for updates, upgrades, or other
enhancements following the expiration or termination of the Contract.
3.8.3. Subcontractor Proprietary Software
The Vendor shall obtain, at no additional cost to the Lottery, a perpetual, non-transferable,
and non-exclusive license to use, maintain and enhance all Subcontractor Proprietary
Software and related documentation. The Lottery's license shall include the right to
updates, upgrades, or other enhancements produced by or for the Subcontractor. The
payments paid by the Lottery, as ultimately determined in accordance with Part 7, Pricing,
the successful Vendor’s proposal and any negotiations thereafter memorialized, shall be the
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sole source of payment for the cost of such updates, upgrades, or other enhancements
during the term of the Contract.
3.8.4. Commercial Software
Vendor shall procure all Commercial Software and related documentation in the
Lottery’s name. All licensing, rights or remedies granted by the Commercial Software
manufacturer to consumers of its Software shall be granted directly to the Lottery. The
Vendor shall obtain all maintenance and all updates, upgrades, or other enhancements to
Commercial Software during the term of the Contract. The payments paid by the Lottery,
as ultimately determined in accordance with Part 7, RFP-compliant Price Proposal, the
successful Vendor’s proposal and any negotiations thereafter memorialized, shall be the
sole source of payment for the cost of such updates, upgrades, or other enhancements
during the term of the Contract.
3.8.5. Delivery of Software to the Lottery
The Vendor shall promptly provide all software and associated documentation to the
Lottery upon request or upon termination or expiration of the Contract.
3.8.6. Inventory of Software
The Vendor shall provide an inventory of all software and related documentation used or
required to perform the RFP within thirty (30) days of the Effective Date of the Contract
and no less than every six (6) months thereafter.
3.8.7. Equipment and Software Corrections and Upgrades
The Vendor's services shall include software fixes to all software errors, design defects,
and improved versions of the software to sustain performance or correct performance
problems, to otherwise meet or continue to meet defined requirements. Included also will
be field maintenance and engineering changes for terminals and equipment which fail to
continue to meet requirements. Equipment and software changes necessary simply to
support increased volumes of transactions from an existing retailer base must be included
in the Vendor's base price for the system.
Changes and enhancements to the equipment and software which exceed contract
specified and current requirements (and which are not otherwise accommodated by the
pricing matrixes and Lottery specified options) (collectively, “Enhancements”) such as
additional terminal peripherals, new terminal types, administrative reporting changes,
new retailer user interface features, or a new gaming format, will be handled as follows:
A. Software Enhancements are included in the base price, even if additional
development is required to create or adapt software for the Lottery’s needs.
B. Capital equipment, facilities, or substantive service Enhancements will be
negotiated.
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Notwithstanding the above, it is agreed that the Vendor shall not be required to
commence programming under this Section with respect to any proposed
software Enhancement unless and until: (a) the Vendor shall have received a
final written request for such proposed Enhancement based upon final written
specifications signed by the Executive Director or Deputy Executive Director,
and (b) the implementation of each other software Enhancement, additional
game, game enhancement or modification, or new written report or modification
previously requested by the Lottery shall have been successfully accomplished,
unless otherwise agreed.
3.9. Source Code Escrow
3.9.1. Escrow
Upon the written request of the Lottery, Vendor shall escrow the following with an escrow
agent acceptable to the Lottery: one (1) copy of all source code for Proprietary Software
used in performance under the Contract; one (1) copy of all documentation related to the
development and maintenance of the Proprietary Software; one (1) copy of all source code
for Subcontractor Proprietary Software; and, one (1) copy of all documentation related to
the development and maintenance of the Subcontractor Proprietary Software.
Escrowed documentation shall include, but is not limited to, build instructions,
programming documentation, configuration information, Software development tools,
compilers, linkers, libraries and any other documentation or resources used by the Vendor
or Subcontractor’s programmers to understand the source code or to develop, compile,
maintain, or update the escrowed Software. If any such documentation is reasonably
available from a commercial source other than the Software owner, the Software owner
may substitute in escrow a written identification of that particular documentation and its
commercial source.
Escrowed documentation shall further include a list of the primary programmers involved
in the development and maintenance of the Software and their home addresses and
telephone numbers. Vendor and Subcontractors shall update the source code and
documentation every three (3) months or when a new version of the escrowed source code
is used under this Contract.
3.9.2. Non-Encryption
Vendor and Subcontractors shall warrant in the escrow agreement that the escrowed source
code and documentation is not encrypted and is accessible to the Lottery if released under
the terms of the escrow agreement.
3.9.3. Verification
The Lottery may, in its discretion, require the verification of the escrow of source code and
documentation by the escrow agent, a third party verification service or by other parties
acceptable to the Lottery and the Software owner.
3.9.4. Transfer to Escrow Agent, Destruction of Escrowed Items and Termination
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Vendor and all Subcontractors shall transfer all right, title and ownership to the escrowed
source code and documentation, including updates, to the escrow agent, subject to the
terms of the escrow instructions. The escrow instructions shall provide that the escrow
agent will destroy the escrowed Software and documentation upon the termination of the
escrow or return it to the Software owner in a specified manner. The escrow instructions
shall authorize termination of the escrow by a mutual, written agreement of the parties or
upon written notice from the Lottery.
3.9.5. Release from Escrow
The escrow instructions shall authorize the escrow agent to release the escrowed source
code and documentation to the Lottery upon the Lottery’s provision of evidence
satisfactory to the escrow agent of the following:
A. The Software owner is no longer maintaining the Software and no successor is
maintaining the Software. The parties stipulate that the Software owner’s written
refusal to maintain the escrowed Software and the failure of the Software owner to
respond within two (2) weeks to a written request to maintain the escrowed
Software with an affirmative, written promise to maintain the Software shall be
satisfactory evidence that the Software owner is not maintaining the Software. The
parties further stipulate that the failure of the promising party to maintain the
Software within two (2) weeks of such affirmative, written promise shall be
satisfactory evidence that the Software owner is not maintaining the Software.
B. The Vendor or Subcontractor owning the Software is the subject of a petition or
proceeding under the U.S. Bankruptcy Code, either voluntary or involuntary, and
such petition or proceeding is not dismissed within sixty (60) days after its
initiation.
C. The Vendor or Subcontractor owning the Software becomes insolvent or admits
either insolvency or a general inability to pay its debts as they become due.
3.9.6. Lottery’s Rights Upon Release
Upon release of the source code and documentation, the Lottery shall have all rights to use,
maintain and enhance the Software as provided in the license granted pursuant to section
3.8, Software Licensing and Ownership. The Lottery may engage non-employees to
assist in the exercise of such rights, including former employees or contractors of the
Software owner.
3.9.7. Escrow Costs
The payments paid by the Lottery, as ultimately determined in accordance with Part 7,
Pricing the successful Vendor’s proposal and any negotiations thereafter memorialized,
shall be the sole source of payment for the cost of the escrow during the term of the
Contract. The Lottery shall pay the costs of the escrow following termination or expiration
of the Contract and all provisions of this section 3.9, Source Code Escrow shall continue to
apply to the escrow. If the Lottery requires third party verification of the escrowed
Software and documentation, the Lottery shall pay the costs of such verification.
3.9.8. Bankruptcy Provisions
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This escrow agreement is an agreement supplementary to the licensing of the Proprietary
Software and Subcontractor Proprietary Software as provided by 11 U.S.C. section 365(n).
If this Contract, the escrow agreement or the license of the Proprietary Software or
Subcontractor Proprietary Software is rejected by the Vendor or Subcontractor as a debtor
in possession or a trustee or by any other person or entity under the U.S. Bankruptcy Code,
the Lottery may elect to retain its rights as provided in 11 U.S.C. section 365(n). The
source code and documentation deposited under this escrow agreement are an
“embodiment” of “intellectual property” as those terms are used in 11 U.S.C. section
365(n).
3.10. Ownership of Materials and Information
Except as specifically provided otherwise in the Contract, the Lottery shall own and retain
all rights to hardware and other goods delivered by the Vendor in performing under the
Contract, and to information, materials, procedures, processes and data developed, derived,
documented, stored, or furnished by the Vendor under this Contract. Information,
materials, procedures, processes and data includes reports, documents, pamphlets,
advertisements, books, magazines, surveys, studies, computer programs, films, tapes,
sound reproductions and all information originating from Vendor’s performance and
delivery under this Contract.
3.11. Patent and Copyright Infringement
3.11.1. Warranty and Indemnification
The Vendor warrants that it has all rights and permissions, including intellectual property
rights and rights of publicity necessary to grant copyright, patent, trademark or
intellectual property rights, including licenses, to the Lottery in performance under this
Contract. The Vendor shall indemnify and hold the Lottery harmless and shall defend at
its own expense any action brought against the Lottery based upon a claim of
infringement of a United States patent, copyright, trade secret, or trademark for
information technology hardware or software, materials, information products, and
services used and performed under this Contract. Vendor will pay all damages and costs
finally awarded and attributable to such claim, but such defense and payments are
conditioned on the following: (i) that the Vendor shall be notified promptly in writing by
the Lottery of any notice of such claim; (ii) that the Vendor shall have the sole control of
the defense of any action on such claim and all negotiations for its settlement or
compromise, and the Lottery may select, at its own expense, advisory counsel; and (iii)
that the Lottery shall cooperate with the Vendor in a reasonable way to facilitate
settlement or defense of any claim or suit. Vendor shall have no liability to the Lottery
under this section for any claim of infringement that is based upon the Lottery’s
modification of Software without the knowledge of the Vendor or the Lottery’s
combination or utilization of Software without the knowledge of the Vendor.
3.11.2. Continued Right to Use or Replacement
Should information technology hardware or software, materials, information, products or
services provided under this Contract become, or in Vendor's opinion be likely to
become, the subject of a claim of infringement of a United States patent copyright, trade
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secret, or trademark, the Lottery shall permit the Vendor, at its option and expense, either
to procure for the Lottery the right to continue using the information technology
hardware and software, materials, information, products or services provided under the
Contract or to replace or modify the same provided under the Contract so that it becomes
non-infringing. In the event that the Vendor is unable or unwilling to secure a continued
right to use the hardware or software, information, materials, products or services
provided under the Contract within a reasonable time, the Lottery may, in its sole
discretion, secure hardware, software, information, materials, products or services
conforming to the requirements of the RFP and deduct the costs of such hardware,
software, information, materials, products or services from payments to the Vendor or
terminate the Contract upon written notice to the Vendor.
3.12. Contract Relationship
It is distinctly and particularly understood and agreed between the parties that the Lottery is
in no way associated or otherwise connected with the performance of any service under this
Contract on the part of the Vendor or with the employment of labor or the incurring of
expenses by the Vendor. The Vendor is an independent contractor in the performance of
each and every part of this Contract, and solely and personally liable for all labor, taxes,
insurance, required bonding and other expenses, except as specifically stated herein, and
for any and all damages in connection with the operation of this Contract, whether it may
be for personal injuries or damages of any other kind. The Vendor shall exonerate,
indemnify, defend, and hold the Lottery harmless from and against and assume full
responsibility for payment of all federal, state, and local taxes or contributions imposed or
required under unemployment insurance, social security, worker’s compensation, and
income tax laws with respect to the Vendor or Vendor’s employees engaged in
performance under this Contract. The Lottery does not assume liability as an employer.
3.13. Hold Harmless
The Vendor shall indemnify the State against any and all loss or damage to the extent
arising out of the Vendor's negligence in the performance of services under the Contract
and for infringement of, or claim of any infringement of, any copyright, intellectual
property, or patent occurring in connection with or in any way incidental to or arising out
of the occupancy, use, service, operations or performance of work under the Contract.
The State shall not be precluded from receiving the benefits of any insurance the Vendor
may carry which provides for indemnification for any loss or damage to property in the
Vendor's custody and control, where such loss or destruction is to state property. The
Vendor shall do nothing to prejudice the State's right to recover against third parties for
any loss, destruction or damage to State property.
3.14. Insurance and Bonding
3.14.1. Insurance
A. The Vendor shall, for the duration of the Contract, maintain in effect all
insurance as required herein and comply with all limits, terms and conditions
stipulated therein. Policies shall provide, or be endorsed to provide, all required
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coverage. Prior to beginning any work, or within two (2) weeks after
notification of award, whichever is earlier, the Vendor must provide
certificate(s) or certified endorsement(s), as applicable, of the insurance
required. Failure to provide the proof of insurance as required may, at the
Lottery's option, result in termination of the Contract. The Vendor shall not
commence work under this Contract until evidence of all required insurance is
provided to the Lottery.
B. Insurance, except for Workers Compensation, Technology Errors and
Omissions, and Cyber Risk, required by this section shall, as applicable, name
the Lottery as an additional named insured, to the extent of the liabilities
assumed by the Vendor, or loss payee, as the Lottery’s interests may apply;
provided, however, that the Lottery shall be named a loss payee as set forth in
subsection d. All insurance shall be with insurers rated A-VII or better in the
latest Bests Rating Guide and in good standing and authorized to transact
business in South Dakota. The coverage provided by such policies shall be
primary to any coverage of the Lottery on or related to the Contract and shall
provide that the insurance afforded applies separately to each insured against
whom a claim is made, except with respect to the limitation of liability. All
required policies shall require thirty (30) days’ notice to the Lottery, by certified
or registered mail, return receipt requested, prior to any cancellation, refusal to
renew or any material change in the nature or extent of the coverage provided.
If any of the liability insurance required under this Contract is arranged on a
“claims made” basis, “tail coverage” will be required at the completion of this
Contract for a duration of twenty-four (24) months thereafter. Vendor shall be
responsible for furnishing certification of “tail coverage” or continuous “claims
made” liability coverage for twenty-four (24) months following contract
completion. Continuous “claims made” coverage will be acceptable in lieu of
“tail coverage” provided the retroactive date is on or before the effective date of
this Contract or twenty-four (24) months “prior acts” coverage is provided.
Vendor waives all rights against the Lottery and its agents, officers, directors
and employees for recovery of damages to the extent these damages are covered
by the required policies. Policies may contain deductibles but such deductibles
shall not be deducted from any damages due to the Lottery.
C. By requiring insurance herein, the Lottery does not represent that coverage and
limits will necessarily be adequate to protect the Vendor and such coverage and
limits shall not be deemed as a limitation on the Vendor’s liabilities under the
indemnities granted to the Lottery.
D. Vendor shall maintain the following insurance in amounts not less than the
following:
a. Worker's Compensation Insurance in amounts as required by statute.
Employer’s liability with a liability limit of $500,000 per Accident,
$1,000,000 Disease, Policy Limit.
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b. Automobile Liability including non-owned and hired with a liability
limit of $5,000,000 per occurrence.
c. Commercial General Liability (CGL) and, if necessary, commercial
umbrella or excess liability with a limit of not less than $5,000,000 each
occurrence/$5,000,000 annual aggregate. The Schedule of Underlying
Insurance in the Umbrella Policy shall include the CGL, the auto policy
and the Employer’s Liability Policy.
d. Comprehensive Crime with a liability limit of $10,000,000 per
occurrence having at least the following coverages: dishonesty (blanket
coverage), forgery, credit card forgery, theft (inside and outside),
embezzlement, wire transfer fraud, computer fraud or theft and other
dishonest acts of any employee or agent whose duties are to provide
services under the Contract. The Lottery shall be named a loss payee on
all Comprehensive Crime policies.
e. Property Insurance for all direct physical loss to computer hardware and
software, including mechanical breakdown and extra expense. Limits
should be consistent with valuation of hardware, software and time
required to restore operations.
f. Technology Errors and Omissions coverage with a liability limit of
$10,000,000 per Claim/Annual Aggregate. Coverage shall indemnify
the Vendor and pay on behalf of Vendor to the Lottery for loss which
may be incurred due to computer error, machine error, any
communication line problems caused by Vendor, its officers, employees,
agents, subcontractors or assigns, regardless of negligence.
g. Cyber Risk having the following coverages: information or identity
theft, liability for misuse or disclosure of third party data, liability for
loss of data, outages or spread of viruses, attacks, destruction or
disclosure of data or electronic information with a liability limit of
$10,000,000 per Event/Annual Aggregate.
h. Professional Liability Insurance or Miscellaneous Professional Liability
Insurance: The Vendor agrees to procure and maintain professional
liability insurance or miscellaneous professional liability insurance with
a limit not less than $1,000,000.00.
3.14.2. Bonding
A. Within thirty (30) calendar days of the effective date of the Contract, the Vendor shall
procure, at its own cost, and submit to the Lottery a performance bond payable to the
Lottery in the amount of five million dollars ($5,000,000) for the initial period of
performance and conditioned on Vendor’s faithful performance. The Vendor shall
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pay the premiums on the performance bond. In the event that the Vendor or any
officer, director, employee or agent of the Vendor or any subcontractor or any parent
or subsidiary corporation of the Vendor or subcontractor fails to fully and faithfully
perform each material requirement of this Contract, including without limitation the
Vendor’s obligation to indemnify the Lottery and pay damages to the Lottery, the
performance bond shall be forfeited to the Lottery. The bond shall be in a form
customarily used in the lottery industry, and be acceptable to the Lottery, and shall be
written by a surety authorized to do business in South Dakota and that is acceptable to
the Lottery. The bond shall be in effect at all times during the term of the Contract
and any extensions or renewals thereof and for ninety (90) days following the
conclusion of the Contract. The Vendor warrants that it will maintain the required
performance bond coverage as described herein without any lapse in coverage. Based
upon Vendor’s performance during the initial contract term, the Lottery reserves the
right to discontinue performance bond requirements for any contract extensions.
B. Failure on the part of the Vendor to furnish such bond, or other proof of bond
coverage acceptable to the Lottery within thirty (30) days of contract execution, or to
maintain the bond in full force and effect during the term of the Contract and any
extension or renewal thereof, unless Lottery discontinues performance bond
requirements at its sole discretion, shall be a material breach of the Contract and shall
be considered cause for the Lottery to declare the Vendor in default under this
Contract. The Lottery’s receipt of such bond or other proof of coverage does not
constitute approval of the bond’s coverage nor do the bonds relieve the Vendor from
the faithful and honest performance of this Contract.
C. The bond must specifically refer to the Contract and shall bind the surety to all of the
terms and conditions of the Contract. The performance bond shall be forfeited if the
Contract is terminated due to the Vendor’s default, breach of the Contract by the
Vendor, or the Vendor’s bankruptcy, whether voluntary or involuntary.
3.15. Subcontracting and Assignment
Vendor shall not subcontract or assign its duties under the Contract without the prior
written approval of the Lottery. The Lottery may, in its sole discretion, impose
reasonable requirements upon the Vendor prior to the approval of any subcontract or
assignment. Acceptance of the Vendor’s proposal specifying subcontracts shall
constitute the Lottery’s acceptance of the specified Subcontractors. Notwithstanding the
Lottery’s approval of any subcontract, the Vendor shall be solely responsible for the
satisfactory performance of all Subcontractors and subcontracted services and for the
compensation of all Subcontractors. The Vendor shall be and shall remain liable for all
costs and damages to the Lottery caused by negligent performance or non-performance of
the subcontracted services. The Vendor shall ensure that each Subcontractor agrees to
comply with the terms of the Contract applicable to its scope of performance.
3.16. Independent Vendor
Both parties, in the performance of the Contract, shall be acting in their individual
capacity and not as agents, employees, partners, joint ventures or associates of one
another. The employees or agents of one party shall not be construed to be the
employees or agents of the other party for any purpose whatsoever.
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3.17. Public Records
Pursuant to South Dakota Law, information or documents received from the Vendor may
be open to public inspection and copying unless exempt from disclosure. The Vendor
shall clearly designate individual documents as “Confidential” on each page of such
documents and shall indicate the basis for such exemption. The Vendor shall indemnify
and defend the Lottery against all liability, claims, damages, losses, expenses, actions,
attorney fees and suits whatsoever for honoring such a designation or for the Vendor’s
failure to designate individual documents as exempt. The Vendor’s failure to designate
as Confidential any document that is released by the Lottery shall constitute a complete
waiver of any and all claims for damages caused by any such release. If the Lottery
receives a request for materials claimed Confidential by the Vendor, the Vendor shall
provide the legal defense for such claim. The Lottery will not accept a legend or
statement on one (1) page that all, or substantially all, of a document is Confidential from
disclosure.
3.18. Vendor Records and Audit Requirements
3.18.1. Maintenance of Records
The Vendor shall maintain all electronic and hardcopy books, records, documents and
other evidence pertaining to the administrative costs and expenses of the Contract to the
extent and in such detail as shall properly reflect all revenues, all net costs, direct and
apportioned, and other costs and expenses of whatever nature for which reimbursement is
claimed under provisions of the Contract. Vendor shall maintain all records and
documents relevant to the Contract for three (3) years from the date of final payment to
Vendor. If an audit, litigation or other action involving records is initiated before the
three (3) year period has expired, Vendor shall maintain records until all issues arising
out of such actions are resolved, or until an additional three (3) year period has passed,
whichever is later. If the existence of Vendor is terminated by bankruptcy or any other
cause, all records related to the Contract in Vendor’s possession shall become the
property of the Lottery and Vendor shall immediately deliver such records to the Lottery.
3.18.2. Availability of Records
All records and documents relevant to the Contract shall be available for and subject to
inspection, review or audit, and copying by the Lottery and other personnel duly
authorized by the State, such as the Department of Revenue, Office of the State Auditor,
Department of Legislative Audit, and by federal inspectors or auditors. The Vendor shall
make its records available to such parties at all reasonable times, at either the Vendor’s
principal place of business or upon premises designated by the Lottery. The Vendor shall
include a provision granting the Lottery access to each Subcontractor’s records to the
same extent as if the records were the Vendor’s in every subcontract relating to this
Contract.
3.18.3. Audit
The Vendor shall engage and pay for an independent certified public accounting firm to
perform an audit of Vendor’s services in accordance with the American Institute of
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Certified Public Accountants Report on Controls at a Service Organization SOC 1 Type 2
Audit. The audit shall be performed annually and apply to both the Online Central
System, Video Lottery Central System and related services such as a back office system
as an example. The Vendor shall submit a copy of the audit report to the Lottery upon
the completion of each audit. The Lottery reserves the right: (a) to specify the type of
report and the control objectives to be examined; (b) to approve the accounting firm
chosen to perform the internal control audit; (c) to designate the period to be covered by
the report and the date by which the report is due; and (d) to require that the first such
internal control audit be conducted with in ninety (90) days of installing the on-line
gaming system.
3.18.4. Audit of Electronic Data Processing Applications
Subject to the approval of the Lottery, the Vendor will contract with an Independent
Certified Public Accounting (CPA) firm with experience in conducting audits of
electronic data processing systems in accordance with standards established by the
American Institute of Certified Public Accountants and the General Accounting Office
for applications comparable to on-line Lottery games application. The Vendor will
require the accounting firm to perform an electronic data processing audit of general and
application controls on the on-line Lottery games and on the Vendor’s quality control
efforts. It is anticipated the audit will include a number of processing functions to be
determined by the Lottery. The cost of these audits will be borne by the Vendor and
there shall be no additional charges billed to the Lottery for these audits.
An audit shall be conducted within the first 9 months of contract execution (before start-
up) and annually within the contract period. The accounting firm will deliver to the
Vendor and to the Lottery a report of findings and recommendations within 3 months of
the close of each review period, except in the case of the review before start-up, which
will be delivered before system start-up.
Each audit shall be conducted in accordance with generally accepted auditing standards
for electronic data processing application reviews. The Vendor will require the
accounting firm to make recommendations based upon such industry standards or any
proprietary system of standards potentially utilized by said firm. The Lottery will use the
findings and recommendations of such report(s) as part of its on-going on-line Lottery
games monitoring process. As required by the Lottery, the Vendor shall implement the
audit recommendations. On a schedule determined by the Lottery, the Vendor shall
submit periodic progress reports on the status of recommendation implementation.
3.19. Audit Exceptions
If a federal or state audit indicates that payments to the Vendor fail to comply with
applicable federal or state laws, rules or regulations, or this Contract, the Vendor shall
refund and pay to the Lottery any compensation paid to Vendor arising from such
noncompliance, plus costs, including audit costs. In the event that any audit discloses
evidence of the Vendor’s non-compliance with any contract term, the Lottery expressly
reserves the right to pursue any remedies available to it under law or contract, including
the assessment of liquidated damages and termination of the Contract.
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3.20. Compliance with Law
3.20.1. Compliance with Law, Licensing, and Certifications
Vendor shall comply with all requirements of federal and state statutes, rules, and
regulations applicable to Vendor or to the services performed by Vendor pursuant to this
Agreement. For the duration of the Contract, the Vendor shall maintain in effect, and
have in its possession, all licenses and certifications required by federal, state and local
laws, rules and regulations, including business and professional licenses.
Vendor shall comply with SDCL 42-7A and ARSD 48:01, 48:02 and 48:03.
3.20.2. Non-discrimination
The Vendor shall provide all services funded through or affected by the Contract without
discrimination on the basis of race, color, national origin, religion, sex, age, or
physical/mental impairment, and shall comply with all relevant sections of the following:
Title VI of the Civil Rights Act of 1964; Section 504 of the Rehabilitation Act of 1973;
The Age Discrimination in Employment Act of 1967; Title IX of the Education
Amendments of 1972; The Age Discrimination Act of 1975; The American's With
Disabilities Act of 1990; Executive Order 11246, as amended by Executive Order 11375;
Department of Labor Regulations, codified at 41 CFR Part 60; Section 402 of the
Vietnam Era Veterans Readjustment Assistance Act of 1974; and, United States
Department of the Interior Regulations, codified at 43 CFR Part 17. The Vendor shall
comply with pertinent amendments to such laws made during the term of the Contract
and with all federal and state rules and regulations implementing such laws. The Vendor
must include this provision in every subcontract relating to this Contract.
3.20.3. Covenant Against Contingent Fees
The Vendor warrants that no person or selling agent has been employed or retained to
solicit or secure this contract upon an agreement or understanding for a commission,
percentage, brokerage or contingent fee, except bona fide employees or bona fide
established agents maintained by the Vendor for the purpose of securing business. The
Lottery has the right, in the event of breach of this clause by the Vendor, to annul this
contract without liability or, in its discretion, to deduct from the contract price or
consideration or recover by other means the full amount of such commission, percentage,
brokerage or contingent fee.
3.20.4. Ticket Purchase and Prize Payment Restrictions
Throughout its period of contract performance, the Vendor must not purchase a Lottery
game ticket, receive any portion of any Lottery prize payment or share any portion of any
prize claimed by a holder of a winning Lottery ticket. Throughout the period of contract
performance, the Vendor must make its best, ongoing efforts to monitor and enforce
compliance with this provision. For the specific purposes of this provision, the term
“Vendor” will be understood to mean the Vendor as a business entity, any and all agents,
employees or subcontractors of the Vendor, and any person residing as a member of the
same household in the principal place of residence of any agent, employee or
subcontractor of the Vendor.
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SDCL §42-7A-33. Purchase of ticket or payment of prize to certain persons prohibited--
Exceptions. No lottery ticket may be purchased by, and no prize may be paid to, any of
the following persons or to any person related by blood or marriage and who is a member
of the same household in the principal place of abode of any such person:
(1) Any member of the commission or employee of the South Dakota Lottery, unless
authorized in writing by the executive director; or
(2) Any officer or employee of a company or business which is currently engaged in
supplying equipment, supplies, or services being used directly in the operation of any
lottery conducted pursuant to this chapter, unless authorized in writing by the executive
director for research purposes. However, no prize may be paid on any ticket purchased
for research purposes.
Nothing in this section prohibits any lottery retailer or his employee from purchasing
lottery tickets or from being paid a prize of a winning ticket. Any person who knowingly
violates this section is guilty of a Class 1 misdemeanor on the first offense and a Class 6
felony on the second or subsequent offense.
3.20.5. Lobbying
A. The Vendor certifies that none of the compensation under the Contract has been paid
or will be paid by or on behalf of the Vendor to any person for influencing or
attempting to influence an officer or employee of any governmental agency, a
member, officer or employee of the South Dakota Legislature in connection with the
awarding, continuation, renewal, amendment, or modification of any contract, grant,
loan, or cooperative agreement.
B. If any funds, other than funds provided by the Contract, have been paid or will be
paid to any person for influencing or attempting to influence an officer or employee
of any governmental agency, a member, officer or employee of the State Legislature
in connection with the Contract, contractor must comply with state lobbying laws. For
further information concerning lobbying, contact the office of the Secretary of State.
C. SDCL §42-7A-28. Persons contracting to supply materials, tickets or consulting
services not to give gifts or loans to commission members or lottery employees--
Violation as misdemeanor. Any person contracting or seeking to contract with the
state to supply materials, tickets, or consulting services for use in the lottery or from a
lottery retailer, person licensed, or an applicant for a contract or license under this
chapter may not offer, pay, give, or make any economic opportunity, gift, loan,
gratuity, special discount, favor, hospitality, or service having an aggregate value of
one hundred dollars or more in any calendar year to a member of the commission or
employee of the South Dakota Lottery, or to any person residing in the same
household of either of the aforementioned. A knowing violation of this section is a
Class 1 misdemeanor.
D. The Vendor shall require that the language of this certification be included in any
subcontract, at all tiers, (including grants, sub-grants, loans, and cooperative
agreements) entered into as a result of the Contract, and that all sub-recipients shall
certify and disclose as provided herein.
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E. The Vendor acknowledges that a false certification may be cause for rejection or
termination of the Contract, and that Vendor’s execution of the Contract is a material
representation of fact upon which the Lottery relied in entering the Contract.
3.20.6. No Conflict
The Vendor certifies and warrants that it presently has no interest and shall not acquire
any interest, direct or indirect, that would conflict in any manner or degree with the
performance of its services under the Contract. The Vendor shall not employ during the
term of this Contract any person known to the Vendor to have any such conflicting
interests.
No member of the Lottery Commission, Executive Director, employee of the Lottery, or
any person residing in the same household of any of the aforementioned, shall directly or
indirectly, individually, as a member of a partnership or other association, or as a
stockholder, director or officer of a corporation have an interest in a business which
contracts under this RFP.
During the period from the RFP release until the award of the contract, Vendors are
prohibited from officially or unofficially making any employment offer or proposing any
business arrangement whatsoever to any Lottery employee involved in the preparation of
the RFP, evaluation of the proposals, the contract award, or contract negotiations. A
Vendor making such an offer or proposition may be disqualified from further
consideration, or the contract signed pursuant to this RFP may be terminated. These
conditions continue for the contractor for a period of one year following the award.
3.21. Personal and Confidential Information
3.21.1. Personal and Confidential Information
The contractor may have access to private or confidential data maintained by the Lottery
to the extent necessary to carry out its responsibilities under the contract. The contractor
must comply with all the requirements of the South Dakota Sunshine Law (Open
Records) in providing services under the contract. The contractor shall accept full
responsibility for providing adequate supervision and training to its agents and employees
to ensure compliance with said Act. No private or confidential data collected, maintained
or used in the course of performance of the contract shall be disseminated by either party
except as authorized by statute either during the period of the contract or thereafter. The
contractor must agree to return any and all data furnished by the Lottery promptly at the
request of the Lottery in whatever form it is maintained by the contractor. On the
termination or such expiration of the contract, the contractor shall not use any of such
data or any material derived from the data for any purpose, and where so instructed by
the Lottery, shall destroy or render it unreadable.
“Private data” includes but is not necessarily limited to names, addresses, Social Security
numbers, e-mail addresses, telephone numbers, financial profiles, credit card information,
driver’s license numbers, medical data, law enforcement records, agency source code or
object code, agency security data or information identifiable to an individual that relates
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to any of these types of information. The Vendor also acknowledges that during the
performance of the Contract it will come into possession of material and information,
financial, personnel, operations-related or otherwise that the Lottery regards as
proprietary or confidential (“confidential data”).
3.21.2. Strictest Confidence
The Vendor agrees to use and hold such Personal and Confidential Information in the
strictest confidence and shall not make use of it for any purpose other than the
performance of this Contract. The Vendor shall only release Personal or Confidential
Information to authorized employees or approved subcontractors requiring such
information for purposes related to contract performance, and shall not release, divulge,
publish, transfer, sell, disclose or otherwise make Personal and Confidential Information
known to any other party without the Lottery’s express written consent or as provided by
law.
3.21.3. Nondisclosure Agreement and Procedural Safeguards
The Vendor agrees to release Personal and Confidential Information required for
purposes related to contract performance only to employees or approved subcontractors
who have executed a nondisclosure agreement, the terms of which have been previously
approved by the Lottery. The Vendor shall maintain a log documenting the Personal and
Confidential Information received in performance of the Contract, the purposes for which
the information was received, who received, maintained and used the information, and
the final disposition of the information. The Vendor’s records shall be subject to
inspection, review and/or audit in accordance with Section 3.18, herein. The Vendor
agrees to implement physical, electronic and managerial policies, procedures and
safeguards to prevent unauthorized access, use or disclosure of Personal and Confidential
Information in any form.
3.21.4. Action upon Termination of the Contract
Upon termination of this Contract, for any reason, Vendor shall return or destroy all
Personal and Confidential Information received from Lottery, or created or received by
Vendor on behalf of Lottery. In the event that Vendor determines that returning or
destroying the Personal and Confidential Information is infeasible, Vendor shall notify
the Lottery of the conditions that make return or destruction infeasible. If the Lottery
agrees that return or destruction of Personal and Confidential Information is infeasible,
Vendor shall extend the protections of this Contract to such Personal and Confidential
Information and limit further uses and disclosures of such Personal and Confidential
Information to those purposes that make the return or destruction infeasible, for so long
as Vendor maintains such Personal and Confidential Information.
3.21.5. Indemnification
The Vendor agrees to indemnify and hold harmless the Lottery for any damages arising
out of, or related to, unauthorized use or disclosure by the Vendor, its officers, directors,
employees, subcontractors or agents. Any breach of this clause may result in termination
of the Contract and the demand for return of all Personal and Confidential Information.
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3.22. Employment of Lottery Personnel
The Vendor shall not, without the prior written consent of the Lottery, knowingly engage
on any basis during the period of the Contract for work related to the Contract any
Lottery personnel who are, or have been at any time during the period of the Contract,
under the employment of the Lottery and engaged in the performance of work directly
related to the Contract.
3.23. Removal of Vendor Personnel
The Lottery may, in its sole discretion, require that Vendor reassign or otherwise remove
from performing services under the Contract, any staff member, Subcontractor, or
Subcontractor staff member reasonably found unacceptable to the Lottery.
3.23.1. Background Investigations During Contract Term
Before a contract for a major procurement is awarded, the Executive Director shall
conduct a thorough background investigation of the Vendor, any parent or subsidiary of
the Vendor, all shareholders of five percent or more interest in the Vendor or parent or
subsidiary of the Vendor, and all officers and directors of the Vendor or parent or
subsidiary of the Vendor to whom the contract is to be awarded. The Vendor shall submit
appropriate investigation authorizations to facilitate this investigation. The Executive
Director may require any additional information from the vendor that is considered
appropriate to preserve the integrity and security of the lottery.
The Lottery will provide the Individual History, Family Members, Investigation
Authorization forms and fingerprint cards. These fingerprints will be used to check the
criminal history records of the State as well as the Federal Bureau of Investigation’s
criminal history records.
The Vendor agrees to make its best efforts to cooperate with any such background
investigation. In the event that any investigation discloses evidence of the Vendor’s non-
compliance with any Contract term, the Lottery expressly reserves the right to pursue any
remedies available to it under law or contract, including the assessment of liquidated
damages and termination of the Contract.
3.24. Resolution of Disputes
The dispute resolution process provided in this section shall apply to all circumstances
where a Specification or deliverable requires the Lottery and the Vendor to collaborate or
cooperate to produce a plan, process, policy or procedure and where there is any dispute
regarding Contract performance and terms. If the Lottery Director and the Vendor are
unable to reach a mutually agreeable plan, process, policy or procedure, either party may
reduce the disputed issue to writing and deliver the notice of dispute to the other party
with a request for resolution. The request for resolution shall be accompanied by
supporting information including, but not limited to, a description of the issue with
citations to the Contract requirements applicable to the issue, and a clear statement by the
requesting party of the party’s interpretation of the issue and the basis for its suggested
resolution of the issue. If the Lottery Director and the Vendor are unable to resolve the
matter, the issue shall be referred to the Lottery Commission. The Lottery Director and
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the Vendor may provide additional information to the Lottery Commission in the time
period and in the manner established by the Lottery Commission. After reviewing the
request for resolution, supporting information, and additional information provided by the
Lottery Director and the Vendor, the Lottery Commission may or may not hold a hearing,
at its sole discretion, and shall reduce its decision to writing and provide a copy thereof to
the Vendor. The decision of the Lottery Commission shall be final and binding upon the
parties; provided, however, that the remedies available to the parties in section 3.24
“Remedies” shall not be limited by this dispute resolution process.
3.25. Remedies
3.25.1. Remedial Action
In addition to any remedies available to the Lottery under law or equity, the Lottery may
at its sole discretion require one or more of the following remedial actions, taking into
account the nature of the deficiency, if any of the services or products do not conform to
Contract requirements: (1) require the Vendor to take corrective action to ensure that
performance conforms to Contract requirements; (2) reduce payment to reflect the
reduced value of services received; (3) require the Vendor to subcontract all or part of the
service at no additional cost to the Lottery; (4) withhold payment or require payment of
actual damages caused by the deficiency; (5) withhold payment or require payment of
liquidated damages; (7) secure products or services and deduct the costs of products or
services from payments to the contractor pursuant to section 3.11, Patent and Copyright
Infringement; or (8) terminate the Contract pursuant to this section 3.25, Remedies, and
sections 3.11, Patent and Copyright Infringement and 3.14, Insurance and Bonding.
3.25.2. Liquidate Damages
3.25.2.1. Liquidated Damages General
The parties to this contract understand and agree that:
A. The equipment and services provided under this contract must be extremely
reliable as described in sections 3, 4, 5, and 6 of this RFP;
B. Any contract breach by the Vendor will disrupt the Lottery's operations and will
lead to damages;
C. Proving those damages will be costly, difficult, time consuming and impractical;
D. The parties will use established liquidated damages formulae to resolve issues that
arise under certain specified damages categories; and
E. The liquidated damages established by this section are fair and reasonable.
3.25.2.2. Rights Reserved to the Lottery
The Lottery reserves the right, at its sole discretion:
A. To assess liquidated damages for non-specific damages;
B. To determine the existence of any factors relevant to the assessment of liquidated
damages (such as the fact or length of downtime or degraded performance);
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C. To waive any or all liquidated damages, without explanation;
D. To assess liquidated damages under each section applicable to any given incident,
and to calculate any liquidated damages assessment based on the cumulative
effect of two or more damages categories
3.25.2.3. Waivers of Liquidated Damages
The waiver of any liquidated damages due the Lottery shall constitute a waiver only
as to such specific liquidated damages and not a waiver of any future liquidated
damages. Failure to assess liquidated damages or to demand payment of liquidated
damages within any period of time shall not constitute a waiver of such claim by the
Lottery.
3.25.2.4. Assessment Procedure
The assessment of liquidated damages will be in addition to, and not in lieu of, such
other remedies as may be available to the Lottery. All liquidated damages
assessments will be made by and at the discretion of the Lottery Director, or by the
Contract Manager under authority delegated by the Director, within one year of the
conclusion of the event upon which the assessment is based. Liquidated damages not
assessed within this period will be waived.
Upon determining that liquidated damages will (or may) be assessed, the Lottery
must notify the Vendor of that fact. Within 15 days of receiving the Lottery’s notice,
the Vendor may submit to the Director (or Contract Manager) a statement of any
factors it believes the Lottery should take into consideration regarding the relevant
facts and circumstances. The Lottery will fully and fairly consider those facts and
circumstances in making any decision regarding the assessment of liquidated
damages.
3.25.2.5. Payment of Liquidated Damages
Assessed liquidated damages will first be deducted from any fees due from the
Lottery to the Vendor, then, if necessary, from any Performance Bond(s) or Security
Bond(s). In the event the amount due the Vendor is not sufficient to satisfy the
amount of the liquidated damages, the Lottery will continue to deduct monies until
the amount due is paid in full. The parties may agree to modify the payment schedule
at the Lottery’s discretion.
3.25.2.6. Conditions for Termination of Liquidated Damages
As determined appropriate by the Lottery, the following are the conditions under
which the Vendor may obtain relief from the continued assessment of liquidated
damages:
A. Unless waived in writing by the Lottery, no liquidated damages imposed shall be
terminated or suspended until the Vendor issues a written notice verifying the
correction of the condition(s) for which liquidated damages were imposed and all
corrections have been subjected to System testing or other verification at the
discretion of the Lottery.
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B. As appropriate, the Vendor shall conduct System testing of any correction as the
Lottery deems necessary. Such testing shall be developed jointly by the Lottery
and the Vendor and must be approved by the Lottery, including the test script, test
environment, and test results. A notice of correction will not be accepted until
verified by the Lottery.
3.25.2.7. Severability of Liquidated Damages Clauses
If any portion of the liquidated damages provisions is determined to be unenforceable
in one or more applications, that portion remains in effect in all applications not
determined to be invalid and is severable from the invalid applications. If any portion
of the liquidated damages provisions is determined to be unenforceable, the other
provision(s) shall remain in full force and effect.
3.25.2.8. Applicability of Liquidated Damages and Pro-Rated Liquidated
Damages
The Vendor shall not be required to pay liquidated damages for delays solely due to
matters affected by force majeure or for time delays specifically caused by or
approved by the Lottery. In all the below liquidated damages sections, the damages
shall be pro-rated for partial periods.
3.25.2.9. Liquidated Damages Stipulations
Stipulations that apply to only the On-line System or only the Video Lottery System
are indicated in the stipulation’s title.
1. Conversion and Startup
i. Condition: Vendor shall complete, except as otherwise approved by
the Lottery in writing, all agreed upon implementation tasks and
deliverables required pursuant to the Contract.
ii. Damages: the Lottery may impose liquidated damages for each
calendar day of delay as follows:
(1) Unresolved errors or failures preventing the successful completion of
User Acceptance Testing (UAT) as specified in the conversion plan –
up to ten thousand dollars ($10,000) per day.
(2) Startup delays beginning with the Contract-agreed production
conversion date - Up to two hundred thousand dollars ($200,000) per
day.
2. Timely and Accurate Deliverables
i. Condition: Each and every deliverable must be accurate, available,
and on schedule as agreed upon by the parties. Deliverables include,
but are not limited to, such things as reports, files, data and the like.
ii. Damages: Up to two thousand five hundred dollars ($2,500) per day
per deliverable.
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3. System Down
i. Condition: The System shall be defined to be "down" if there is a
total Network outage, terminal application failure, or any other
condition for any reason that prevents:
(1) the execution of critical gaming functions such as those related to a
game draw; and/or,
(2) the occurrence of key transactions, such as activations, sales, cancels
and validations by a retailer terminal or any other device provided by
the Vendor and supported by the System.
The Vendor has a cumulative grace period of three (3) minutes per day
to resolve any and all issues causing the System “down” condition.
The cumulative time during which the System is down during the day
shall be the sum of all time during such daily operational sales period
when the System is "down." To address chronic problems, in the
event that two (2) downtime events of any length, for any reason, have
already occurred in any seven (7) calendar day period, the grace period
of three (3) minutes shall be rescinded.
ii. Damages: Up to one thousand two hundred fifty dollars ($1,250)
for each one (1) minute of System downtime, or fraction thereof.
4. System Degraded Performance
i. Condition: The System shall evidence "degraded performance", for
any reason, no more than one (1) hour during the operational sales
period on any day. The total cumulative time during which the System
performance is degraded during a day shall be the sum of all time
during such daily operational sales period when the System
performance is degraded. To address chronic problems, in the event
that two (2) degraded time events of any length have already occurred
in a seven-calendar day (7) period, the grace period of one (1) hour
shall be rescinded. The System shall be considered as having degraded
performance when:
(1) Retailer terminals fail to meet the response time as stated in the
Vendor’s Proposal or as agreed to otherwise, or the System is
incapable of meeting the throughput specifications provided in the
Contract;
(2) The System processes transactions from less than 95% of the installed
and operational retailer terminals;
(3) The System processes transactions from all terminals, but not for all
gaming products, gaming functions (e.g., pay, cancel, etc.), or retailer-
related activities;
(4) Transactions are not logged to the System as required in the Contract
or to the Lottery’s ICS units;
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(5) Critical functions of System management and/or administration cannot
be conducted by the management workstations. These include but are
not limited to file transfers to the Lottery, and billing statements to
retailers;
(6) Instant ticket inventory management is compromised, including the
ability to receive, order, pack, ship, activate and/or settle instant
tickets, etc. in a manner concordant with production schedules;
(7) During a defined promotion period the System cannot issue tickets
and/or conduct transactions to support the promotion; or
(8) The number of active servers in the Gaming System falls below the
standard established in the Vendor’s Proposal. A Gaming System
server is considered active if it is networked with the System,
processing transactions real time, contains the correct software
version, and is capable of taking over primary functions (e.g.,
failover). Those instances where a server contains a different software
version as part of a staggered software update previously approved by
the Lottery are not included in this sub-item.
ii. Damages:
(1) For conditions identified in 2, 3, 6 and 7 above, up to thirty thousand
dollars ($30,000) per hour may be assessed for each hour of degraded
performance, or fraction thereof.
(2) For conditions identified in 1, 4, 5 and 8 above, up to five thousand
dollars ($5,000) per hour may be assessed for each hour of degraded
performance, or fraction thereof.
5. Terminal Field Service (On-line System only)
The Vendor shall ensure the timely repair or replacement of inoperable
terminals. The Lottery will determine whether a terminal is inoperable.
Terminals will be considered inoperable if:
There is no ticket stock available at the retailer location;
The terminal cannot perform any or all of the following functions: sell
tickets; validate tickets, cancel and process claims (including instant
ticket validations); and/or
The terminal cannot print tickets that are legible to the machine and to
the human eye.
Repair/replace terminals: For the purposes of this section, the following
definitions shall apply:
“Hard Down" means a terminal is not able to produce a draw ticket or
validate draw or instant tickets upon request as a direct result of
Vendor error.
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“Critical Up" means a terminal is able to produce draw tickets and validate
draw or instant tickets; however, one or more other functions of the
terminal do not work or do not work properly;
“Signage Down" means a customer-oriented monitor does not work properly.
“Hours of Operation" means the business day of the Lottery during which
time the Vendor is required to receive and process wagers, validations
and other transactions on behalf of the Lottery, exclusive of time that
the specific retailer requesting service is closed, or such time that the
Lottery data network is shut down for daily processing, if any such
time exists. The Vendor shall maintain services, but will not be subject
to Liquidated Damages on the following days: July 4th, Thanksgiving
Day, Christmas Day and a fourth discretionary day. The Lottery shall
have a minimum of 14 working days prior written notice of
discretionary day and may deny consent up to 72 hours prior to the day
requested. This clause may be modified by the Lottery in the event of
high jackpots as set forth below.
"Terminal Classes." For purposes of calculating liquidated damages for this
section, each retail location shall be assigned to one of three classes
based upon its average weekly draw game sales. The Vendor will
provide to the Executive Director, upon request, an updated report of
all retailers and their classes. This report will be in an agreed upon
format and written to a disk or such other media as the Lottery may
designate.
Class A. Top selling terminals which account in aggregate for 50 percent of
gross sales based on the preceding two weekly billing periods.
Class B. Terminals not in Class A with average gross sales greater than $500
per week based on the preceding two weekly billing periods.
Class C. All terminals not included in Class A or B.
"Back in Service" or "Returned to Service" means that after replacement or
repair of a hard down terminal has been performed, the terminal
remaining at the retail location following replacement or repair is
capable of performing all terminal functions.
“Promotional Event Locations” means any event at which the Lottery
conducts any promotions remote from Lottery headquarters, including,
but not necessarily limited to, fairs, festivals, music concerts, races and
trade shows.
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Terminal Repair Request – Hard Down. For the purposes of this section,
the following geographical areas are defined for determining response
times to calls for service to the Vendor's service personnel:
Two-Hour Response Area. Any retail location with a "Class A"
terminal, and all promotional event locations selling lottery games
shall have a two (2) hour response time by Vendor field service
personnel to all "Hard Down" terminal repair requests.
Three-Hour Response Area. All retailer locations with a “Class B”
terminal shall have a three (3) hour response time to all "Hard Down"
terminal repair requests.
Eight-Hour Response Area. All terminals not included in class A or
B shall have an eight (8) hour response time by Vendor field service
personnel to all “Hard Down” terminal repair requests.
Response Time Provisions. The Vendor will have a total of one-half (1/2)
hour to repair or replace any hard down terminal from the time the
service personnel arrives on scene to the time that the terminal is
placed back in service. The total repair time, including travel time,
shall not exceed two and one-half (2 1/2) retailer business hours to any
"Hard Down" repair request from the time that the retailer or Lottery
notifies the Vendor until the terminal is returned to service, for any
terminal at a retailer in one of the "Two-Hour Response Areas" listed.
The total repair time, including travel time, shall not exceed three and
one-half (3 1/2) retailer business hours, from the time the retailer or
Lottery notifies the Vendor until the terminal is returned to service, for
any retailer located in a "Three-Hour Response Area." The total repair
time, including travel time, shall not exceed eight and one-half (8 ½)
retailer business hours, from the time the retailer or Lottery notifies the
Vendor until the terminal is returned to service, for any retailer located
in an “Eight-Hour Response Area”.
Terminal Repair Request - Critical Up. Terminals which are in an “A or B
Critical Up” status when reported by the retailer or Lottery to the
Vendor shall be repaired and returned to service within eight (8) hours
and twelve (12) hours for Class C terminals, including travel time and
repair time, regardless of the retailer's location within the state. Refer
to “Terminal Classes,” above.
Terminal Repair Request - Signage. Terminals which have a monitor, LED
sign, or any other form of signage maintained by the Vendor which is
down must be responded to and repaired within eight (8) hours from
the time the retailer or Lottery notifies the Vendor for Class A or B
terminals and twelve (12) hours for Class C terminals, including travel
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time, regardless of the retailer's location. Refer to “Terminal Classes,”
above.
Liquidated Damages for Terminal Repair. The liquidated damages which
may be assessed for the failure to respond to a service call within the
time frames are set forth in this section. “Penalty down time” means
the number of minutes in excess of the maximum number of minutes
allowed for resolution of any event, as set forth above. Liquidated
damages shall be assessed at the rates listed below:
Average Weekly Previous 52 week’s sales, divided by the normal weekly total
minutes of operation during said previous 52 weeks, multiplied by the
number of minutes of penalty down time
Note: Penalty for any retailer with less than a 52 week sales history will be
calculated using the average of the total number of sales weeks
available.
6. Escalation of Damages for High Sales Volumes (On-line System only). On
the day of any failure where the jackpot for any draw game exceeds the
amounts listed below, damages assessed for failure to repair or install any
terminal or for failure to deliver supplies will be increased by the factors in the
table below:
Note: In cases where this section applies to more than one draw
Lottery game, the higher percentage factor shall be used to determine
escalation charges.
Multi-State Games:
Jackpot Factor
$70 Million up to $100 Million ........150%
Over $100 Million up to $200 Million……175%
Over $200 Million ...…………………………… 200%
In-State Games:
Jackpot Factor
$20,000 up to $75,000…….......… 150%
Over $75,000 up to $150,000 ………... 175%
Over $150,000 ………………………………….200%
7. Terminal Preventive Maintenance (On-line System only)
i. Condition: The Vendor and the Lottery shall agree on a preventative
maintenance cycle for retailer terminals. Preventative maintenance will
occur at least quarterly
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ii. Damages: If there is delay for any retailer terminal scheduled
preventive maintenance that exceeds the planned maintenance day by
thirty (30) days or more, then the Lottery may impose liquidated
damages of up to one hundred ($100) dollars per day until the
condition is rectified.
8. Terminal Installation and Moves (On-line System only)
i. Condition: The Vendor shall install or move all retailer terminals
within five (5) working days of notification from the Lottery. The
Vendor may not pass fault to a Subcontractor.
ii. Damages: $200 per day per each effected terminal.
9. Failure to Modify Existing Games or to Install Additional Games (On-
line System only)
i. Condition: The Vendor shall accurately modify and convert existing
games or accurately install additional games (and their supporting
controls) in accordance with the agreed upon release schedule. The
Vendor’s change must complete UAT and receive the Lottery's written
approval, within the time frame specified.
ii. Damages: Up to one hundred thousand dollars ($100,000) per day
that the upgrades, modifications or installations are not completed.
The Vendor is not obligated to pay liquidated damages if the Lottery
opts to release the change at a later time than the agreed-upon
schedule.
10. Failure to Produce an Administrative Software Change
i. Condition: The Vendor shall modify or add software to produce
reports, screen displays, inquiries, and other administrative
applications in accordance with an agreed upon release schedule. The
Vendor’s change must complete UAT and receive the Lottery's written
approval, within the time frame specified therein.
ii. Damages: Up to five hundred dollars ($500) per day that the modified
or additional software is not installed.
11. Failure to Support an Instant Ticket Game (On-line System only)
i. Condition: The Vendor must ensure that instant ticket games are
properly converted and supported. The System must handle instant
ticket transactions and produce reports for all games ordered by the
Lottery from its instant ticket supplier(s).
ii. Damages: Up to ten thousand dollars ($10,000) per day per game for
any instant game(s) for which the Vendor does not provide timely
and/or correct instant ticket transaction handling and reporting.
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12. Unauthorized Software/Hardware Modifications
i. Condition: The Vendor shall not modify any software or hardware
without the prior, authorized written consent of the Lottery.
ii. Damages: Up to ten thousand dollars ($10,000) per violation in
addition to any other damages that may occur as a result of such
unauthorized modification.
13. Unauthorized Access or Compromise
i. Condition: The Vendor shall preclude any persons, not authorized by
the Lottery, from accessing, modifying, or otherwise interfering with
the System, Test System, and any data or software. Each person and
every act that permits access, modification, or interference by an
unauthorized person is an incident.
ii. Damages: Up to fifty thousand dollars ($50,000) per person, for each
incident.
14. Supply Shortage (On-line System only)
i. Condition: The Vendor shall furnish the retailers, or cause the same
to be done, any essential supplies, and consumables for all games for
which Vendor is responsible for supplying (not including instant
tickets or point-of-sale advertising materials).
ii. Damages: Up to five hundred dollars ($500) per retailer per day or on
a prorated basis for any portion of a day for failure to deliver essential
supplies and consumables in 14(i) above.
15. Failure to Report Incidents
i. Condition: It will be the responsibility of the Vendor to immediately
report all significant incidents related to the operation of the System.
The immediate reporting shall be delivered personally or by telephone
within one (1) hour of the discovery of the incident, followed by a
written communication to the Lottery’s Executive Director and the
Director of Information Technology within twenty-four (24) hours of
the incident. At a minimum, each of the following types of events
shall require a written report:
(1) System takeovers/failovers;
(2) Major communications failures;
(3) Significant operator errors;
(4) Failure to collect and accurately record data;
(5) Out-of-balance conditions (On-line System only);
(6) Emergency software or hardware changes;
(7) Security violations;
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(8) Other conditions as defined by any applicable memoranda of
understanding that might be developed between the Lottery and
Vendor at any time during the Term; and
(9) Any situation which the Vendor believes may cause the general public
to become alarmed and/or which may damage the integrity or public
image of the Lottery.
ii. Damages: Up to ten thousand dollars ($10,000) per day or prorated
fraction thereof, until an incident is correctly reported from the time of
the incident.
16. Failure to Provide Software Testing and Quality Software Turnovers
i. Condition: The Vendor must provide a quality assurance test plan, a
report on the quality assurance test, and quality-tested software in
accordance with the agreed upon release schedule.
ii. Damages: Up to five thousand dollars ($5,000) per day for each
violation (return or retraction of the software).
17. UAT environment
i. Condition: All integral parts of the UAT environment must be made
available by the Vendor for the use of the Lottery at the beginning of,
and during normal business hours. This includes the UAT server(s),
all communication types, terminals, and requested data as agreed by
the Vendor and the Lottery.
ii. Damages: Up to two thousand dollars ($2,000) may be assessed per
day that any element of the UAT environment is unavailable.
18. Failure to Comply with Proper System Procedures
i. Condition: If, without prior authorization, the Vendor deviates from
specific instructions or usual, customary, or established operating
procedures, and that deviation causes an out of balance condition for
any on-line game (extending for more than twenty-four (24) hours
following close of that draw), or disruption to the retailer community
or the player base, the Lottery may assess liquidated damages.
ii. Damages: Up to fifty thousand dollars ($50,000) per occurrence.
19. Audit Compliance
i. Condition: The Vendor and the Lottery will agree to a Condition: The
Vendor shall comply with any audit recommendations, according to
the schedule established by the Lottery. The Vendor and the Lottery
may discuss audit recommendations and the Lottery may, after
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evaluating the associated risks and costs, elect to waive some or all
recommendations.
ii. Damages: Up to two thousand five-hundred dollars ($2500) per week
for each recommendation with which the Vendor fails to demonstrate
timely compliance.
20. System Restoration
i. Condition: The Vendor shall restore the system for retrieval of the
previous 18 months of wagering transactions and instant ticket
accounting system transactions within 12 hours of the Lottery’s
written request
ii. Damages: Up to five hundred dollars ($500) per hour beyond an
initial 12-hour grace period.
21. Network Conversion:
i. Condition: During the new contract conversion/phase-in period,
before July 1, 2019, the Vendor shall not perform any network-related
activity that results in interruption of the normal operation of the
Lottery’s terminals. Furthermore, it is contemplated that the Lottery,
approximately one year prior to the expiration of any contract resulting
from this RFP, will award a new contract. The parties understand and
agree that the Lottery may utilize part of the last year of the contract
resulting from this RFP for conversion of the lottery gaming system to
the subsequent system, and the Vendor shall fully cooperate in the
conversion process.
ii. Damages: Up to five hundred dollars ($500) per hour for each retailer
terminal that is unable to sell draw tickets due to the Vendor’s
conversion related activity, until the terminal is returned to normal
operational status.
22. Insufficient Vendor Resources for Ongoing Operations:
i. Condition: Lottery and Vendor shall agree on set of criteria for the
staffing of hotline, conversion, field service, marketing support, and
training services based on performance measures and values. The
Lottery will notify the Vendor of its failure to meet performance
standards. The Vendor will have 14 calendar days from its receipt of
such notice to cure the failure.
ii. Damages: Up to five hundred dollars ($500) per day after 14 days
from notification of failure to meet performance standards.
23. Unapproved Claimed Tickets:
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i. Condition: The lottery gaming system shall neither produce nor
validate a ticket that the Lottery does not determine to be a valid
winning game ticket according to its game rules and prize claim
procedures.
ii. Damages: The Vendor shall be liable for the amount of the ticket as
well as any associated damages the Lottery incurs in investigating or
curing the situation.
24. Defective or Non-Conforming Ticket:
i. Condition: The lottery gaming system shall not produce defective or
non-conforming tickets due to any terminal equipment or printer
malfunction or failure that causes loss of revenue or the inability to
pay appropriate prizes.
ii. Damages: Up to twenty-five thousand dollars ($5,000) per incident
plus any liability for the ticket.
25. Non-represented tickets:
i. Condition: The Vendor shall be liable for all non-altered winning
tickets issued by the Vendor system and presented for redemption
which are not identified as valid, winning, saleable tickets on the
transaction master log files and validation files furnished to the Lottery
by the Vendor.
ii. Damages: The Vendor shall pay all prize costs for any such ticket and
shall pay any additional costs incurred by the Lottery.
26. Failure to Comply with Security Requirements:
i. Condition: The Vendor shall provide, install and maintain all security
requirements as set forth in the Contract and as approved by the
Lottery Director of Security and Lottery Executive Director or
designee.
Upon receipt of written notification from the Lottery Director of
Security of new security requirements and/or modifications to existing
security requirements, the Vendor shall have a maximum of 30 (thirty)
days to be in full compliance with the new or modified security
requirements.
ii. Damages: Should the Vendor fail to be in compliance within the 30
(thirty) days, the Lottery may assess, as liquidated damages, one
thousand dollars ($1000) per day per violation. In the event of a
system breach, damages shall be assessed to cover the costs to repair
the breach and any lost revenue.
27. Compliance with MUSL Minimum Security Standards:
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i. Condition: All services, products, systems, and procedures to be
employed by the Vendor must comply with MUSL Minimum Game
Security Standards and MUSL Rule 2 at the time of Contract
performance and as may be changed during the term of the Contract.
ii. Damages: Up to two thousand dollars ($2,000) per day, per violation.
28. Instant Ticket Validation System:
i. Condition: The terminal network is unable to accept and/or transmit
instant ticket transactions during normal draw operation sales hours, as
specified by the Lottery, and the malfunction is due to Vendor failure.
ii. Damages: Up to two thousand five hundred dollars ($2,500) per hour
of cumulative network down time. Cumulative network down time
shall mean the sum of all network down time (whether or not
consecutive) during the day's operational sales period in excess of 15
(fifteen) minutes per day.
iii. Condition: The instant ticket system communications link between
the Vendor system and the Lottery system malfunctions or otherwise is
unable to accept and/or transmit transactions during normal draw
operational sales hours, as specified by the Lottery and the
malfunction is due to Vendor failure.
iv. Damages: Up to one thousand dollars ($1,000) per hour of cumulative
communications link down time during the sales day. Cumulative
communications link down time shall mean the sum of all
communications link down time (whether or not consecutive) during
an entire day's operational sales period, in excess of 15 (fifteen)
minutes per day.
29. Failure to connect Establishments (Video Lottery System only)
i. Condition: Establishments are not connected according to the
mutually agreed upon timeline for phased implantation.
ii. Damages: Up to one thousand dollars ($1,000) per establishment per
day.
30. Non-Represented events (Video Lottery System only)
i. Condition: The Video Lottery Central System fails to accurately
record and store data with the ability to accurately retrieve and
transmit in the time and format specified in the Software Requirements
Specifications for all VLT events in the master log files and such other
files specified by the Lottery.
ii. Damages: Up to two thousand five hundred dollars ($2,500) per
failure.
31. Failure to provide required staffing
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i Condition: Vendor does not provide required staffing as specified in
section 4.11 or as determined in contract negotiations. The Lottery
will provide notice that liquidated damages will be assessed, allowing
the Vendor a period of time not to exceed two weeks to provide
replacement staffing.
ii. Damages: Up to two thousand dollars ($2,000) per day after the two
week period has lapsed.
32. Failure to maintain required software licenses
i. Condition: Vendor must provide a software license inventory and
ensure that all software is under license at all times during the term of
the Contract. Failure to maintain a license on installed software will
result in damages being assessed.
ii. Damages: Up to one thousand dollars ($1,000) per day for each
unlicensed software installation.
33. Failure to keep Systems synchronized
i. Condition: Vendor must ensure that the software and hardware
configuration used at the testing laboratories remains synchronized,
or compatible, with the production System.
ii. Damages: Up to five hundred dollars ($500) per day for each
location that is not synchronized with the production System.
34. Other Losses
Notwithstanding damages defined above, the Lottery will plan to
assess liquidated damages to recover losses in full due to negligence,
willful errors, and omissions by the Vendor.
3.25.3. Termination by Lottery
The Lottery may cancel the Contract at any time, with or without cause, upon no less than
thirty (30) calendar days' prior written notice to the Vendor specifying the date of
termination.
3.25.4. Termination for Cause
Either party may terminate the Contract immediately upon written notice, or upon such
notice as such party, in its sole discretion, deems appropriate, if at any time: (a) the other
party is in material breach of any warranty, term, condition, covenant or obligation under
the Contract; (b) judicial interpretation of federal or state laws, regulations, or rules
renders fulfillment of the Contract infeasible or impossible; (c) Vendor’s license or
certification required by law is suspended, not renewed, or is otherwise not in effect at
the time service is provided; or (d) Vendor fails to comply with any applicable law,
regulation, or rule.
3.25.5. Effect of Termination
Upon termination by the Lottery, Vendor shall: (a) promptly discontinue all work, unless
the termination notice directs otherwise; (b) place no further orders or requests of
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Subcontractors, if any, for materials, services, or facilities; (c) terminate all orders and
subcontracts to the extent that they relate to the performance of work terminated by the
termination notice; (d) assign to the Lottery, in the manner and to the extent directed by
the Lottery, all right, title, and interest of the Vendor under the orders or subcontracts so
terminated, in which case the Lottery shall have the right, in its discretion, to settle or pay
any or all claims arising out of the termination of such orders and subcontracts; (e) with
the advance approval of the Lottery, settle all outstanding liabilities and all claims arising
out of such termination of orders and subcontracts the cost of which would be
reimbursable, in whole or in part, in accordance with the provisions of the Contract; (f)
promptly return to the Lottery any property provided by the Lottery pursuant to the
Contract; (g) deliver or otherwise make available to the Lottery all data, reports,
estimates, summaries and such other information and materials, including Personal and
Confidential Information, as may have been accumulated by the Vendor in performing
the Contract, whether completed or in process; and, (h) complete all requirements and
comply with all provisions of the transition plan, in accordance with Section 3.28, herein.
Upon termination by the Lottery, the Lottery may take over the services and may award
another party a contract to complete the services contemplated by the Contract. Upon
termination for cause, the Lottery shall be entitled to reimbursement from Vendor for
losses incurred as a result of the Vendor’s breach.
3.26. Force Majeure
The Vendor shall not be held liable if the failure to perform under the Contract arises out
of causes beyond the control of the Vendor. Causes may include, but are not limited to,
acts of nature, fires, tornadoes, quarantine, strikes other than by Vendor's employees, and
freight embargoes.
If the Vendor or Lottery is delayed, hindered, or prevented from performing any act
required under the Contract by reason of delay beyond the reasonable control of the
asserting party due to theft, fire, Act of God or public enemy, severe and unusual weather
conditions, injunction, riot, strikes, lockouts, insurrection, war, or court order, then
performance of the act shall be excused for the period of the delay. In that event, the
period for the performance of the act shall be extended for a period equivalent to the
period of the delay. Matters of the Vendor’s finances shall not be considered a Force
Majeure.
3.27. Waiver
Waiver of any breach of any provision in the Contract shall not be a waiver of any prior
or subsequent breach. Any waiver shall be in writing and any forbearance or indulgence
in any other form or manner by State shall not constitute a waiver.
3.28. End of Contract Conversion and Transition
3.28.1. Best Efforts and Cooperation
In anticipation of the termination date of this contract, consistent with any established
end-of-contract phase-out schedule and consistent with the new system conversion
schedule established between the Lottery and any successor Vendor, the Vendor must
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exercise its best efforts and cooperation to effect an orderly and efficient transition to any
successor Vendor.
3.28.2. Transition and Phase-Out Services
Upon the Lottery Director’s written notification the Vendor shall furnish transition and
phase-out services for up to six months before the expiration date of this Contract and
negotiate in good faith with the Lottery and with any successor Vendor for a
transition/phase-out plan that clearly defines the nature and extent of the transition and
phase-out services required, including the disposition of any pre-existing equipment.
3.28.3. Written Strategy for End of Contract Conversion and Transition
The Vendor will provide, for the Lottery Director’s approval, a written strategy detailing
the end-of contract conversion and transition/phase-out plan; and provide sufficient
experienced personnel during the end-of-contract phase-out period to ensure that all
contract services continue to be provided at the required level of proficiency and
professionalism, up to the date on which any subsequent successor Vendor assumes
Contract responsibilities.
3.28.4. Extension of Contract by the Lottery
In the interest of an effective end of contract transition to any successor Vendor, the
Lottery reserves the right to extend this Contract for up to 180 days.
3.29. Transition Assistance
In the event of contract termination or expiration, Vendor shall provide all reasonable and
necessary assistance to State to allow for a functional transition to another Vendor.
3.30. Care of State Property
The Vendor shall be responsible for the proper care and custody of any state owned
personal tangible property, intellectual property, and any real property furnished for
Vendor's use in connection with the performance of the Contract. The Vendor shall
reimburse the State for such property's loss or damage caused by the Vendor, except for
normal wear and tear.
3.31. Retention of Records
Unless the State specifies in writing a different period of time, the Vendor agrees to
preserve and make available at reasonable times all of its books, documents, papers,
records and other evidence involving transactions related to the Contract for a period of
five (5) years from the date of the expiration or termination of the Contract.
Matters involving litigation shall be kept for one (1) year following the termination of
litigation, including all appeals, if the litigation exceeds five (5) years.
3.32. On-Site Inspection
The Lottery has the right to inspect, approve, monitor, plan or evaluate any phase of any
game or system development at the Vendor's offices or elsewhere. The Lottery vendor
shall be responsible for the transportation, lodging and meals for up to four Lottery
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personnel required to approve, plan, monitor or observe any market research, game
modifications or development up to four (4) times a year or as may be mutually agreed
upon by the parties pursuant to the State of South Dakota travel and subsistence
regulations. Such expenses shall be accounted for and submitted to the Vendor and shall
operate as an offset against the amounts payable under the Contract by the Lottery to the
Vendor.
Failure to adequately inspect the premises shall not relieve the Vendor from furnishing
without additional cost to the State any materials, equipment, supplies or labor that may
be required to carry out the intent of the Contract.
3.33. Indefinite Quantity Contract
This is an open-ended contract between the Vendor and the State to furnish an
undetermined quantity of a good or service in a given period of time. The quantities
ordered will be those actually required during the contract period, and the Vendor will
deliver only such quantities as may be ordered. No guarantee of volume is made. An
estimated quantity based on past history or other means may be used as a guide.
3.34. Technology Refresh
At any time during the contract, the Vendor and the Lottery may negotiate for any type of
system refresh the Lottery decides is in its interest. The refresh factor shall be
determined by mutual agreement and added to or revising the payment terms originally
established.
3.35. Prices
Prices shall remain firm for the entire contract except as otherwise provided herein.
Prices shall be net delivered, including all trade, quantity and cash discounts. Any price
reductions available during the contract period shall be offered to the State of South
Dakota. Failure to provide available price reductions may result in termination of the
Contract for cause.
3.36. Federal, State, and Local Taxes
Unless otherwise specified, the contracted price shall include all applicable federal, state
and local taxes. The Vendor shall pay all taxes lawfully imposed on it with respect to any
product or service delivered in accordance with the Contract. The State of South Dakota
is exempt from state sales or use taxes and federal excise taxes for direct purchases.
These taxes shall not be included in the contracted price. Upon request, the State shall
provide to the Vendor a certificate of tax exemption.
The State makes no representation as to the exemption from liability of any tax imposed
by any governmental entity on the Vendor.
3.37. Debarment of State Vendors
Any Vendor who defaults on delivery or does not perform in a satisfactory manner as
defined in this Agreement may be barred for up to a period of three (3) years, pursuant to
SDCL 5-18D-12, or have its work evaluated for pre-qualification purposes. Vendor shall
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disclose any conviction or judgment for a criminal or civil offense of any employee,
individual or entity which controls a company or organization or will perform work under
this Agreement that indicates a lack of business integrity or business honesty. This
includes (1) conviction of a criminal offense as an incident to obtaining or attempting to
obtain a public or private contract or subcontract or in the performance of such contract
or subcontract; (2) conviction under state or federal statutes of embezzlement, theft,
forgery, bribery, falsification or destruction of records, receiving stolen property; (3)
conviction under state or federal antitrust statutes; and (4) any other offense to be so
serious and compelling as to affect responsibility as a state contractor including any
gambling related crimes . For the purpose of this section, an individual or entity shall be
presumed to have control of a company or organization if the individual or entity directly
or indirectly, or acting in concert with one or more individuals or entities, owns or
controls 5 percent or more interest, or otherwise controls its management or policies.
Failure to disclose an offense may result in the termination of the contract.
The Vendor certifies that neither it, its principals, or any subcontractor which the Vendor
will utilize in furtherance of this agreement are presently debarred, suspended, proposed
for debarment, declared ineligible or voluntarily excluded from participation in this
Agreement by any federal department or agency.
3.38. Materials and Workmanship
The Vendor shall perform all work and furnish all supplies and materials, machinery,
equipment, facilities, and means, necessary to complete all the work required by the
Contract, within the time specified, in accordance with the provisions as specified.
The Vendor shall be responsible for all work put in under these specifications and shall
make good, repair and/or replace, at the Vendor's own expense, as may be necessary, any
defective work, material, etc., if in the opinion of agency and/or Procurement and
Contracts said issue is due to imperfection in material, design, workmanship or Vendor
fault.
3.39. Industry Standards
If not otherwise provided, materials or work called for in the Contract shall be furnished
and performed in accordance with best established practice and standards recognized by
the contracted industry and comply with all codes and regulations which shall apply.
3.40. Implied Requirements
All products and services not specifically mentioned in the Contract, but which are
necessary to provide the functional capabilities described by the specifications, shall be
included.
3.41. Submission of the Proposal
Submission of the proposal will be considered presumptive evidence that the vendor is
conversant with local facilities and difficulties, the requirements of the documents and of
pertinent State and/or local codes, state of labor and material markets, and has made due
allowances in the proposal for all contingencies. Later claims for labor, work, materials,
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equipment, and tax liability required for any difficulties encountered which could have
been foreseen will not be recognized and all such difficulties shall be properly taken care
of by Vendor at no additional cost to the State of South Dakota.
3.42. Acceptance
No contract provision or use of items by the State shall constitute acceptance or relieve
the Vendor of liability in respect to any expressed or implied warranties.
3.43. Third Party Beneficiaries
The Contract shall not be construed as providing an enforceable right to any third party.
3.44. Injunctions
Should South Dakota be prevented or enjoined from proceeding with the acquisition
before or after contract execution by reason of any litigation or other reason beyond the
control of the State, Vendor shall not be entitled to make or assert claim for damage by
reason of said delay.
3.45. Staff Qualifications
The Vendor shall warrant that all persons assigned by it to the performance of the
Contract shall be employees of the Vendor (or specified Subcontractor) and shall be fully
qualified to perform the work required and promised. The Vendor shall include a similar
provision in any contract with any Subcontractor selected to perform work under the
Contract.
Failure of the Vendor to provide qualified staffing at the level required by the contract
specifications may result in termination of the Contract and/or damages.
3.46. Ownership
All data, forms, procedures, software, manuals, system descriptions and work flows
developed or accumulated by the Vendor under the Contract shall be owned by the
Lottery. The Vendor may not release any materials without the written approval of the
Lottery.
3.47. Information/Data
Any and all information/data required to be provided at any time during the contract term
shall be made available in a format as requested and/or approved by the State.
3.48. Certification of Materials Submitted
The Proposal, together with the specifications set forth herein and all data submitted by
the Vendor to support their response including brochures, manuals, and descriptions
covering the operating characteristics of the item(s) proposed, shall become a part of the
contract between the Vendor and the State of South Dakota. Any written representation
covering such matters as reliability of the item(s), the experience of other users, or
warranties of performance shall be incorporated by reference into the contract.
3.49. Integration
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The Contract, in its final composite form, shall represent the entire agreement between
the parties and shall supersede all prior negotiations, representations or agreements, either
written or oral, between the parties relating to the subject matter hereof. This Agreement
between the parties shall be independent of and have no effect on any other contracts of
either party.
3.50. Modification
The Contract shall be modified only by the written agreement and approval of the parties.
No alteration or variation of the terms and conditions of the contract shall be valid unless
made in writing and signed by the parties. Every amendment shall specify the date on
which its provisions shall be effective.
3.51. Severability
If any provision of the Contract is determined by a court of competent jurisdiction to be
invalid or unenforceable to any extent, the remainder of the Contract shall not be affected
and each provision of the Contract shall be enforced to the fullest extent permitted by
law.
3.52. ADA Compliance and Accessibility
The Vendor agrees that the products or services to be provided under the Contract shall
comply with applicable state and federal law.
3.53. Software Code and Intellectual Property Rights
As applicable, all original software and software code and related intellectual property
developed or created by the Vendor in the performance of its obligations under the
Contract or any Task Order issued under the Contract, shall become the sole property of
the State of South Dakota. The Vendor will surrender all original written materials,
including any reports, studies, designs, drawings, specifications, notes, documents,
software and documentation, computer-based training modules, electronically or
magnetically recorded material, used to develop this software and/or software code and
related intellectual property to the state entity for which it was developed.
3.54. Inspection
The State reserves the right to reject, on arrival at destination, any items which do not
conform to specifications of this Request.
3.55. Inspection of all Vendors
All Vendors shall be required to submit in their response to this RFP the name, address,
telephone number, and type of legal entity with whom the contract will be written. Each
Vendor shall also disclose all trade names and assumed names and states wherein these
trade and assumed names are used, along with appropriate authorization(s) for
investigation to facilitate an investigation. A copy of Vendor’s latest financial statement
shall also be attached. All Vendors shall also provide the following information:
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A. A list of all Vendors’ contracts with lotteries in the past ten (10) years, along
with a contact person from each lottery who is familiar with the performance
pursuant to such contract(s).
B. A list of all past and pending criminal and civil proceedings that resulted from
contractual relationships with lotteries in the past ten (10) years. The list shall
include the type of proceeding, the parties involved, the date of the proceeding,
the custodian of the records, and the outcome of the proceeding.
C. A list of all past and pending liquidated damages and related or similar damages
in excess of ten thousand dollars ($10,000) assessed against Vendor by any
lottery jurisdiction over the past ten (10) years. The list shall include the name
of each lottery jurisdiction, the nature of and reason for liquidated damages, the
date of assessment, the amount assessed, and the final result of any appeal or
other action to reconsider or challenge the assessment.
3.56. Information Provided by Apparent Successful Vendor
Vendors are advised that the apparent successful vendor will also be required to provide
the following information and costs:
A. Federal Employer Identification Number and identification and certification of
compliance with all South Dakota tax and business registration requirements.
B. Identification of any officer(s) of the Vendor or persons participating in the
preparation of the proposal who were State of South Dakota employees within the 24-
months preceding Vendor’s offer, including the name, agency of employment, job
title, social security number, and date of termination of employment with the State of
South Dakota.
C. The three (3) most recent federal income tax returns, including schedules and
attachments thereto, for the legal entity associated with the Federal Employer
Identification Number identified in section (A).
D. If background investigations are not already complete, the background information
provided by the Vendor may be used by any of the following South Dakota entities in
order to complete the background investigation of the apparent successful Vendor(s),
and persons referred to in Section 3.56 herein: Executive Director of the Lottery,
Secretary of Revenue, and Attorney General. Any information discovered as a result
of such investigation may be used in the evaluation of the Vendor’s fitness to perform
the requested services. The Lottery may, in its sole discretion, disqualify the apparent
successful Vendor if it is discovered that the moral character of one or more of the
individuals identified in Section 3.56 herein is not beyond reproach. Persons upon
whom background investigations are required shall be fingerprinted and shall not
have (1) been convicted of a felony in this or any other jurisdiction, unless at least ten
(10) years have passed since satisfactory completion of the sentence or probation
imposed by the court for each such felony; or (2) have ever been convicted of any
illegal gambling activity in this or any other jurisdiction.
E. The successful Vendor shall be responsible for all costs associated with the
completion of required background investigations on it as set forth in this section,
along with all post-award investigations required because of any changes in the
persons listed and/or changes in the ownership or structure of Vendor’s business.
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F. The successful Vendor shall be required to complete such documents as requested by
the Lottery to complete the background check process.
3.57. State Tax Requirements
Lottery may reject the bid of any vendor that is in arrears on taxes due to the State of
South Dakota.
3.58. Non-appropriation
It is understood and agreed that the Lottery is a governmental agency and this Contract
shall in no way be construed so as to bind or obligate the Lottery or the State of South
Dakota beyond the term of any particular appropriation of funds by the State Legislature
as may exist from time to time. The Lottery reserves the right to terminate this Contract
if, in its sole judgment, the legislature of the State of South Dakota fails, neglects or
refuses to appropriate sufficient funds, or requires any return or “give-back” of funds
required for the Lottery to perform under the Contract, or if the executive branch of the
State of South Dakota mandates any cuts or holdback in Lottery’s spending. Any such
termination shall take effect on ten (10) days notice.
3.59. Attorney Fees
In the event of a legal proceeding of any kind instituted under the Contract or instituted to
obtain performance or to remedy a default under the Contract, the prevailing party shall
be awarded such additional sums as the court may adjudge for reasonable attorney fees
and to pay all costs and disbursements incurred in connection therewith.
3.60. Advertising
The Vendor agrees to submit to the Lottery all advertising and publicity matters relating
to this contract in which the Lottery’s name is mentioned or in which language is used
from which the connection of the Lottery may, in the Lottery’s judgment, be inferred or
implied. The Vendor agrees not to publish or use such advertising and publicity matters
without the prior written consent of the Lottery.
3.61. Amendment
The Contract may not be released, discharged, changed, extended, modified,
subcontracted or assigned in whole or in part (collectively, an “Amendment”) except to
the extent provided by a written instrument signed by the Vendor and the party
authorized to bind the Lottery as more particularly described in this section. The Lottery
Director is authorized to execute Amendments consisting solely of any plans required by
the RFP and working documents that further define the day-to-day responsibilities of the
Vendor and the Lottery. The Lottery Director is not authorized to execute Amendments
increasing monetary obligations of the Lottery or extending the Contract term without
Lottery Commission approval. An Amendment not executed in compliance with this
section shall be void.
3.62. Consent and Approvals
3.62.1. Not to Be Unreasonably Withheld or Delayed
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Any consent or approval required to be given by the Vendor or the Lottery under the
provisions of the Contract shall not be unreasonably withheld or delayed.
3.62.2. Extension of Vendor’s Time to Perform
If the Vendor is delayed, hindered, or prevented from performing any act required under
the Contract by reason of the unreasonable withholding of a consent or approval by the
Lottery, the Vendor may request a revision to the Contract extending the Vendor’s
performance deadlines. The Vendor shall request a revision to the Contract within
twenty-one (21) days of the Lottery’s failure to provide consent or approval if a date for
the consent or approval is provided in the Contract within a reasonable period if no such
date is provided. The provisions of section 3.24, Resolution of Disputes and section 3.61,
Amendment shall apply to the Vendor’s request for a revision under this subsection. This
subsection shall not apply to the Lottery’s withholding of payment to the Vendor.
3.63. Indemnification- Third Party Claims- General
Notwithstanding any limitation in this Contract, and to the fullest extent permitted by
law, Vendor shall defend and hold harmless Indemnitees for and against any and all suits
or claims of any character (and all related damages, settlement payments, attorneys' fees,
costs, expenses, losses or liabilities) by a third party which are attributable to bodily
injury, sickness, disease or death, or to injury to or destruction of tangible property
arising out of or in connection with the goods or services acquired hereunder or caused in
whole or in part by any act or omission of the Vendor, its subcontractors, their
employees, workmen, servants, agents, or anyone directly or indirectly employed by
them or anyone for whose acts any of them may be liable, regardless of whether or not
caused in part by an Indemnitee, and whether or not such claims are made by a third party
or an Indemnitee; however, if an Indemnitee's negligent act or omission is subsequently
determined to be the sole proximate cause of a suit or claim, the Indemnitee shall not be
entitled to indemnification hereunder. The Vendor shall be given timely written notice of
any suit or claim. Vendor's obligations hereunder are in no way limited by any protection
afforded under workers' compensation acts, disability benefits acts, or other employee
benefit acts. This Section shall not negate, abridge, or reduce any other rights or
obligations of indemnity which would otherwise exist. The obligations of this Section
shall survive termination, cancelation, or expiration of this Contract. This Section shall
be construed fairly and reasonably, neither strongly for nor against either party, and
without regard to any clause regarding insurance. As used in this Section, "Indemnitees"
means the State of South Dakota, the Lottery, its Commissioners and all their respective
officers, agents and employees.
The Vendor, as part of its duty of indemnification, is required to defend and hold
harmless the State from any costs arising out of the prosecution or defense of any action
arising out of the Vendor’s performance under this Contract, including any action
affecting the payment or denial of the payment of lottery winnings in whole or in part.
The Vendor shall notify the Lottery of the filing of any such litigation, and the Lottery
shall give the Vendor written notice of any such claim, in the event such claim comes to
the attention of the Lottery first. The Lottery shall have the right, but not the obligation,
to participate in the litigation and, subject to prior review and discussion, shall also have
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the right to ultimately decide matters concerning any litigation arising out of the action
affecting the payment or nonpayment of lottery winnings.
Vendor also agrees to advise the Lottery of any claims asserted or brought against
Vendor arising from this Contract and which may potentially expose the Lottery to
liability and to coordinate with the Lottery on any issues of governmental or public
interest or concern relating to the Lottery and/or this Contract. In the event of
participation by the Lottery in the defense of any claim, which shall be solely at the
discretion of the Lottery, the Lottery shall be responsible for its own costs and expenses.
If the Lottery, in its sole discretion, determines that the action may expose the Lottery to
liability, the Vendor will not settle any such claims arising hereunder without the express
prior written permission of the Lottery. The Vendor will, in all instances, bear its own
attorneys’ fees and expenses, and failure to comply herewith will entitle the Lottery to
make appropriate deductions from the monthly fixed fee due to the Vendor or to draw
upon the security pursuant to this Contract.
The Vendor further agrees that in the event it is requested to produce in any litigation any
document or information referring or relating to the State or the Lottery, it shall not
produce the requested material before it has notified the Lottery and provided it a
reasonable opportunity to appear and object to the production or revelation of the
Lottery's material or information. The Lottery will inform the Vendor when a request is
made for it to produce a document or information in litigation that refers to or relates to
the Vendor.
3.64. Indemnification- Intellectual Property
(a) Without limitation and notwithstanding any provision in this Contract, Vendor
shall, upon receipt of notification, defend and indemnify the Lottery and its respective
Commissioners, officers, agents and employees against all actions, proceedings or
claims of any nature (and all damages, settlement payments, attorneys' fees (including
inside counsel), costs, expenses, losses or liabilities attributable thereto) by any third
party asserting or involving an IP right related to an acquired item. The State shall
allow the Vendor to defend such claim so long as the defense is diligently and capably
prosecuted. The State shall allow Vendor to settle such claim so long as all settlement
payments are made by Vendor and the settlement does not impose a non-monetary
obligation upon the State. State shall reasonably cooperate with Vendor's defense
of such claim.
(b) In the event an injunction or order shall be obtained against State's use of any
acquired item, or if in Vendor's opinion, the acquired item is likely to become the
subject of a claim of infringement or violation of an IP right, Vendor shall, without in
any way limiting the foregoing, and at its expense, either:
(1) procure for State the right to continue to use, or have used, the acquired
item, or
(2) replace or modify the acquired item so that it becomes non-infringing
but only if the modification or replacement does not adversely affect the
specifications for the acquired item or its use by State.
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If neither (1) nor (2), above, is practical, State may require that Vendor remove the
acquired item from State, refund to State any charges paid by State therefor, and take
all steps necessary to have State released from any further liability.
(c) The Vendors obligations under this paragraph do not apply to a claim to the
extent that the claim is caused by the Vendor’s compliance with specifications
furnished by the State:
(1) unless Vendor knew its compliance with the State's specifications would
infringe an IP right, or
(2) if the State knowingly relied on a third party's IP right to develop the
specifications provided to Vendor and failed to identify such product to Vendor.
(d) As used in this Section, these terms are defined as follows: "IP right(s)" means a
patent, copyright, trademark, trade secret, or any other proprietary right. "Acquired
item(s)" means the rights, goods, or services furnished under this Contract.
"Specification(s)" means a detailed, exact statement of particulars such as a statement
prescribing materials, dimensions, and quality of work.
(e) Vendor's obligations under this clause shall survive the termination,
cancellation, rejection, or expiration of this Contract.
3.65. Acceptance Test Prior to Implementation
The Lottery will conduct a series of acceptance tests to fully determine the passing or
failing of the Vendor's installation in accordance with the specifications of the contract.
Failure of the Vendor to pass these tests may result in the Vendor having to make
corrections, delaying conversion, or forfeiting up to the full amount of the performance
bond.
The system will be tested for each and every requirement in the Contract and for
performance as stipulated in the accepted proposal. The Vendor's assistance in arranging
tests will be necessary. The Lottery, at its sole discretion, will determine whether
performance against the acceptance tests is adequate, and conversion can proceed as
scheduled.
Passing an acceptance test in no way removes the obligation of the Vendor to meet, and
to continue to meet, all requirements of the Contract.
3.66. Non-Exclusive Rights
Except as otherwise provided in this RFP, it is understood and agreed by the Vendor that
the Lottery does not grant the Vendor exclusive rights to provide all equipment, materials
and services required by the Lottery during the period covered by the contract. In the
event the Lottery decides that the development, manufacture, and delivery of equipment,
materials and services required by the Lottery by another contractor (each, a “Third
Party”) is in the Lottery’s best interest, the Lottery reserves the right during the period of
the Contract, subject to the provisions below, to contract for, purchase, or use additional
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equipment, materials and services from such Third Party and said action does not infringe
upon nor terminate the contractual agreements resulting from the Contract. The Lottery
shall provide not less than ninety (90) days written notice to the Vendor of its intention to
contract for, purchase, or use additional equipment, materials and services from a Third
Party in connection with the Lottery Gaming System, the communications system, or the
sale of lottery products thereunder (which notice shall include a detailed description of
such equipment, materials or services). The Vendor shall provide a written report to the
Lottery as soon as reasonably practicable but in no event later than sixty (60) days after
receiving such notice based upon information provided by the Lottery, which report shall
analyze the potential areas of incompatibility, if any, between the Lottery Gaming
System, and the Third Party provided equipment, materials or services, and the potential
adverse effects, if any, upon the Lottery Gaming System and its functioning of the
proposed introduction of such Third Party provided equipment, materials or services.
The Vendor shall not be liable under the Contract for damages caused by Third Party
provided equipment, materials or services.
4. Technical Specification: On-line System
4.1. Introduction and Current Environment
The South Dakota Lottery is looking for the Vendor to propose a comprehensive,
robust, technologically current, future oriented, and secure On-line Central System and
Related Services that will enable the Lottery to maximize transfers to the state. The
Vendor will then agree to enhance the system to satisfy the Lottery’s current and
future business needs and complete a timely and smooth conversion. The Lottery’s
ultimate goal is to increase net revenues generated for the State of South Dakota and
enhance the efficiency and effectiveness of the Lottery.
The On-line Central System and Related Services must be flexible and have the ability
to expand and adapt to changing technologies and the ways in which lottery tickets are
sold and purchased. The On-line System and Related Services must also meet or
exceed existing and future data security requirements, operate in or virtualize different
environments, and support various existing and evolving ways to play. Additionally,
the On-line System and Related Services must maintain current service functionality,
provide for value-added enhancements, business intelligence and management
reporting, require low overhead on maintenance and be operationally reliable for the
lottery and its retailer and player network.
The On-line System and Related Services provided by the winning Vendor will
replace and/or upgrade the current gaming system, the Lottery’s Internal Controls
System (ICS), and the communications network between the Lottery and its gaming
Vendor and retailers that interfaces with draw and instant games/systems. The Lottery
may also seek to have a Vendor replace its in-house accounting and instant ticket
management system, and/or provide a sales force automation system.
The Gaming System and Related Services shall provide a fully-functioning draw sales
and integrated instant ticket (or instant ticket pass-through) system including
hardware, software, communications, system installation, data conversion and system
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operation, as well as systems that interface with existing or new accounting and
internal controls systems (currently ACCLAIMS and Elsym ICS). The Lottery’s goal
is to obtain a system that will provide the best value in technology and operations that
are available today and the greatest flexibility to adapt to technological and
operational changes in the future. This includes, but is not limited to, the ability to
integrate and interface with downstream systems, seamless connections with third
party software and hardware, the use of web services, interactive gaming applications
and devices, and the ability to realize two-way communications between and amongst
all component parts.
4.2. Central Systems for Games Support
4.2.1 Host System: Mandatory Feature(s):
4.2.1.1 Central System Features - Mandatory Feature(s):
The Vendor shall describe in detail the proposed Central System that
will provide comprehensive functionality. This includes but is not
limited to all gaming and Instant ticket activities, sales, jackpots,
validations, inventory management, retailer management, claims
processing, marketing support, invoicing to terminal, information
management reporting, Instant Ticket validation, and retailer billing.
4.2.1.1A Central System Optional Features- Specified Option(s)
The Vendor is invited to propose an alternative to the Lottery’s
current ACCLAIMS system functionalities. These optional features
include, but are not limited to, Instant Ticket inventory
management, Instant Ticket ordering, Instant Ticket distribution,
tracking and combined accounting, and Retailer billing for Instant
Tickets integrated with Draw Game billing.
4.2.1.2 Games - Mandatory Feature(s):
At a minimum the proposed Gaming System shall be able to
support multiple types of Instant and Draw Games. In the proposal
the Vendor shall provide details of the games in the games library
that are included in the base price. The system shall accommodate
the current 620 retailers and any anticipated expansion of the retailer
base. The System must have the capacity to accommodate the pass
through of 100 concurrent Instant Games if the Lottery does not
utilize the Vendor’s System for Instant Ticket management. It shall,
as delivered, be able to process up to 150,000 sales transactions per
minute, be able to process up to 5,000 combined wagers, and cash
(validations) per minute and be able to process all gaming
transactions for at minimum 17 hours per day (currently 6:00 AM-
11:00 PM CT), with the option of 24 hours per day processing, 7
days a week, including all holidays.
4.2.1.3 System Architecture Redundancy - Mandatory Feature(s):
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The System architecture shall be fully redundant, without a single
point of failure and shall be failover capable and must operate in an
active/active configuration with auto-failover features.
4.2.1.4 System Architecture Compliancy - Mandatory Feature(s):
The System architecture shall, at all times, remain compliant with
all requirements of any multi-jurisdictional game group(s) relating
to the sale of, or the security for, any game sold by the Lottery.
4.2.1.5 System Field Lengths - Mandatory Feature(s):
All fields shall have variable field lengths and be expandable as
needed to accommodate growth. The system shall have the initial
capacity for a sales day of at least one billion dollars
($1,000,000,000) with the capacity to expand as required, and a
multi-billion dollar ($999,999,999,999) jackpot.
4.2.1.6 System Fault Tolerance - Mandatory Feature(s):
The system shall have fault-tolerant software and hardware
providing for fail-safe operation. This provides for minimal service
disruption, with no loss or corruption of data in the event of
hardware or software problems or failures.
4.2.1.7 System Design - Mandatory Feature(s):
Both a primary and a backup system are required and both shall be
active/active which will ensure both sides of the pair are updated
simultaneously and to ensure that both systems have all transaction
data. All transactional data shall be electronically transferred to the
Lottery’s Internal Control System (ICS) at intervals as near real time
as possible as specified by the Lottery.
4.2.1.8 Third Party Compatibility - Mandatory Feature(s):
The Vendor shall describe how the system shall be compatible with
third-party gaming hardware, software, games and widely adopted
open APIs and standards. Additionally, the Lottery would expect
that the Vendor will make available/expose software services and
publish documentation for those software services that would enable
third party developers to create apps for public access to disclosable
Lottery data such as winning numbers, number frequency, and other
published and publicly available lottery data. A detailed description
of system capability shall be included in the Proposal.
4.2.1.9 ITIL Best Practices - Mandatory Feature(s):
The Vendor must follow ITIL Release, Validation, Control and
Change Management best practices and the Lottery agreed upon
defined Change Management Policies and Procedures.
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4.2.1.10 Host System Security Patch Management - Mandatory
Feature(s):
The Vendor shall explain how it will test and apply security patches
to the host operating system in a timely manner.
4.2.1.11 Host System Version Control - Mandatory Feature(s):
The Vendor shall explain how the host operating system software
version control will be administered.
4.2.1.12 Host System Upgrades - Mandatory Feature(s):
Gaming software and hardware shall be available and upgradeable
throughout the term of the contract, and throughout all possible
contract extensions. The Vendor shall provide the System upgrades
and updates necessary to remain compliant with the requirements of
the Contract over the term of the Contract at no additional charge.
Best practices for equipment updates and upgrades should be
respected, as opposed to updating critical infrastructure equipment
only contingent upon extensions or other variations within the
Contract. At no time should the primary/secondary or disaster
recovery Systems be unsupported by the original equipment
manufacturer.
4.2.1.13 Host System Retailer Functions - Mandatory Feature(s):
The Lottery shall be able to activate, de-activate and re-activate a
retailer’s ability to perform gaming functions (that is, to sell draw
games, validate draw games, perform Instant Ticket processes, etc.).
The system must have the ability to limit product lines, product line
features, and promotions to certain retailers based on specific
criteria (such as, for example only, region, chain, or business type).
If the proposed system can support other non-traditional gaming
formats or environments, the Vendor is encouraged to describe that
process. Instant and On-line processes shall operate independently
of one another, allowing for continued function of one if the other is
down.
4.2.1.14 Host System Ad Hoc Reports - Mandatory Feature(s):
All data entry and system-calculated fields shall be ad hoc
reportable for user report creation.
4.2.1.15 Host System Secure Connections - Mandatory Feature(s):
The Vendor shall describe how there will be no capacity to connect
to any gaming system from a remote device without Lottery
approval.
4.2.1.16 Host System Balancing - Mandatory Feature(s):
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The Vendor shall describe the means of electronically balancing all
Vendor-determined draw game drawing results with the Lottery ICS.
4.2.1.17 Instant Ticket Financials - Mandatory Feature(s):
The Vendor shall explain how they will provide a flexible and
adaptive method of instant ticket settlement and billing that is
responsive to the needs of the Lottery and its Retail Partners.
4.2.1.18 Host System Non-traditional Gaming Formats or Environments
- Mandatory Feature(s):
The Vendor shall describe how the proposed system will support
other non-traditional gaming formats or environments for sales of
Lottery games.
4.2.2 Data Center Operations - Mandatory Feature(s):
The Vendor, at a minimum, shall provide:
4.2.2.1 Staffing plan, security (physical and network), and plan for
maintaining a fully configured and operational primary and backup
site (geographically separated) that ensures instantaneous failover and
recovery without loss of transactions.
4.2.2.2 The primary and backup site shall be located within the United
States.
4.2.2.3 The System configuration, documentation, functional
capability, and capacity at the backup site shall be equivalent to that at
the primary site. The backup site shall be fully capable of supporting
Lottery operations independent of the primary site.
4.2.2.4 The backup Gaming System shall be monitored in real-time by
the primary Gaming System staff and recorded in accordance with
industry standards.
4.2.2.5 The Vendor shall describe the software, security aspects, and
operational procedures for executing the terminal-generated game
draws, and the specific features and benefits that offer more secure
control of its games.
4.2.3 Failovers – Mandatory Feature(s):
In order to be MUSL Rule 2 compliant, the Vendor shall describe how
failovers to backup host systems will be performed, how often test failovers
will be conducted and how those test results will be reported to the Lottery. In
the event of any portion of failover fails, an immediate notification will be
made to the Lottery detailing what failed along with root cause of the failure
and remediation plans. Remediation plan results will be provided to Lottery
and subsequent failover testing shall be conducted. This cycle shall continue
until the failover test is deemed successful by mutual agreement between
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Lottery and Vendor. Failover processes must also comply with MUSL
security failover processes.
4.2.4 Secure Connections – Mandatory Feature(s):
All data communications external to secured facilities, including but not
limited to those between the Primary Data Center (PDC), Backup Data Center
(BDC) and the Lottery, shall be encrypted at an encryption level generally
accepted in the lottery industry at that time. The Lottery’s Security Director
shall approve the proposed encryption mechanism that shall meet the South
Dakota Bureau of Information and Telecommunication’s standards.
The Vendor shall describe how it will meet, maintain and keep up to date with
current encryption standards and provide an example of where it has the
proposed encryption level currently deployed. All 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 as per MUSL Rule 2 Requirements and
State of South Dakota Security Policies.
4.2.5 Terminal Network – Mandatory Feature(s):
The Vendor shall describe in detail its proposed Terminal Network. The
Lottery expects the Vendor to be creative in its communications network
design, in order to allow for maximum flexibility, growth, traffic throughput,
cost effectiveness and security.
The proposed communication network shall support (link) all computer sites
(PDC, BDC and Lottery Headquarters) and retailer locations.
4.2.6 Terminal Network Cost – Mandatory Feature(s):
The Vendor shall be solely responsible for the cost of the communications
network.
4.2.7 Host System Capacity – Mandatory Feature(s):
The Vendor shall explain how the capacity of its host system will be flexible
and expandable. The Vendor shall describe the proposed system’s ability to
adapt to upgrades in operating systems and system architecture and strategy
for implementing upgrades in operating systems and system architecture.
4.2.8 Operating Hours – Mandatory Feature(s):
The proposed system shall be capable of supporting all Lottery gaming
activities up to 24 hours a day, 7 days a week, every day of the year. Planned
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Maintenance must fall within Lottery agreed to window for work. All
maintenance and upgrades shall occur with zero downtime to the system.
This is achieved by the active/active configuration and the ability of both the
Primary and Secondary Systems ability to act as the Primary at any given
time.
4.2.9 Equipment Safety Standards– Mandatory Feature(s):
The Vendor shall certify that the computing equipment, terminals, monitors
and PCs all meet Underwriters Laboratories or equivalent certification.
4.2.10 Equipment Upgrades– Mandatory Feature(s):
The proposed Host System, and support for such, must have a projected end-
of-life beyond the initial contract and all extensions. The Vendor must certify
that the computing equipment, terminals, monitors and PCs are new, or used
and meet Underwriters Laboratories or equivalent certification. The Vendor
shall describe its approach to equipment upgrades (e.g., under what
circumstances it will upgrade equipment). Best practices for Equipment
updates and upgrades should be respected, as opposed to updating critical
infrastructure Equipment only contingent upon extensions or other variations
within the Contract. At no time should the primary/secondary or disaster
recovery Systems be unsupported by the original Equipment manufacturer.
4.2.11 Business Continuity Planning – Mandatory Feature(s):
The Vendor shall define plans for Business Continuity. The plan shall
identify the impact of potential disruptions and loss of data, and provide steps
to mitigate risk and ensure business continuity.
4.2.12 Disaster Recovery Plan – Mandatory Feature(s):
The Vendor shall submit a detailed Disaster Recovery Plan to the Lottery for
approval no later than July 1, 2019, which will be reviewed annually and
updated as needed. The Lottery Executive Director and Security Director shall
approve the Plan. At a minimum, the Disaster Recovery Plan must include
annual testing provisions, an outline of business resumption critical functions
and non-critical functions, a Business Impact Analysis, a Risk, Threat, and
Vulnerability Analysis, a Recovery Strategy, an Emergency Response
Strategy, a Problem Escalation Strategy, a Plan Activation Protocol, a
description of Recovery Operations; and a description of Plan Validation,
Testing and Maintenance.
4.2.13 User Acceptance Test Systems – Mandatory Features(s):
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The Vendor shall describe in detail its Quality Assurance (QA) and User
Acceptance Test (UAT) processes. The Vendor is required to maintain a
UAT environment and provide the necessary support to the Lottery
throughout the software testing process.
The Vendor shall provide a dedicated system for User Acceptance testing. The
Vendor shall provide a lab environment that duplicates the production system
including the ability to test load and failover. The Vendor shall describe their
test and development system configuration.
All UAT testing shall be conducted at the Lottery's test lab which is located in
Pierre, South Dakota and shall be established and maintained in accordance
with MUSL requirements and Lottery IT and Security standards. If requested,
the Vendor shall provide onsite personnel to assist the Lottery with UAT. The
vendor shall be responsible for all expenses associated with providing the
onsite personnel.
A play generator/simulator shall be available during acceptance testing for
testing large transaction volumes. Vendor shall use a play generator to
simulate large transaction volumes.
The ability to test failover before system acceptance shall be available during
acceptance testing. The ability to perform failover shall be maintained during
acceptance testing.
4.2.14 Instant Single Ticket Accounting – Specified Option(s):
The Vendor shall propose technologies and/or methods that would provide
accounting for instant ticket sales as they happen. The Lottery is looking for a
solution to the retailer problem of shrinkage and the cumbersome process of
reconciling Instant ticket sales/inventory with the added benefit of more
precise knowledge of inventory levels at the retailers and more precision in
measuring ticket-by-ticket sales.
4.2.15 Lottery Information Technology (IT) Allowance – Mandatory
Feature(s):
The Vendor will financially support the Lottery’s Information Technology
efforts to support the gaming efforts of the Lottery. As a minimum the
Vendor’s support will consist of $25,000 per contract year. The allowance
will be cumulative and spent at the direction of the Lottery. All portions of
said monies not used in any contract year may be used in any subsequent
contract year as the Lottery may determine at its sole discretion.
4.3 Retailer Terminal
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4.3.1 Terminal – Mandatory Feature(s):
The lottery is looking for the Vendor to propose as many terminal types,
including the use of used terminals, that would fit the various retail style
establishments and explain why that terminal type would satisfy the retailers’
needs. The terminal (including associated peripherals and consumables) shall
be designed to gain acceptance from retailers. The proposed terminals shall be
subject to Lottery approval.
The Vendor shall propose terminal models based on retailer type, retailer
counter space, retailer sales, etc. The retailer terminal shall meet retailers’
requirements for limited available counter space and sales levels. Preference is
for a compact size that will ensure Retailer acceptance. The Proposal shall
describe the physical size and weight of the terminal(s) proposed and how the
proposed terminal(s) will meet the needs of diverse lottery retailers with
proposed conceptualizations for flexibility and growth based on retailer
expansion and/or improvements in available technologies.
The Vendor shall provide terminals as needed throughout the contract to
maximize Lottery revenue.
The terminal and all of its peripherals shall continue to look and operate like
new or be replaced at the Vendor’s expense.
4.3.2 Terminal Ticket Production – Mandatory Feature(s):
The Vendor shall explain the terminal boot-up time. The Vendor shall fully
explain the speed of sales transactions from the presentment of a play slip or a
manual request, number of screens to navigate, and number of retailer inputs
required to make a transaction. The Vendor shall fully explain the speed of
sales transactions from the transmission of the player’s play slip or a manual
request until the printed ticket is cut. For ease of comparison, Vendors shall
explain the time for a single terminal-generated play (such as a Powerball
play) to the time the printed ticket is cut (“send to cut speed”). The Vendor
shall explain whether its send to cut speed meets or exceeds industry standards
4.3.3 Terminal Messaging – Mandatory Feature(s):
The Vendor shall describe its plan to communicate with the retailers via the
terminal including Amber alerts.
4.3.4 Terminal Printer – Mandatory Feature(s):
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Terminal Printers shall meet the Retailers’ needs regarding limited counter
space. Vendor should describe how their printer meets the needs of lottery
Retailers.
4.3.5 Reader/Scanner Functions – Mandatory Feature(s):
The Vendor shall describe how the terminal shall read and process multiple
existing bar codes and UPC codes from paper and mobile devices and give
examples of those uses. The Vendor shall also describe how it will
accommodate new Reader/Scanning technologies that the Lottery may wish to
use in the future.
4.3.6 Terminal Safeguards – Mandatory Feature(s):
The Vendor shall describe in detail how security measures, safeguards, audit
logs, or other features are incorporated to ensure all facets of retail operations are
designed, to the extent possible, to protect the integrity of all transactions (sales,
invoicing, detection of employee or owner misconduct, theft, and/or fraud). The
Vendor shall explain the capability of the equipment proposed to assist the
retailer to manage Lottery inventory, promote Lottery products, ensure the
integrity of sales and claims, and provide the players with the information
through printouts from the terminal or other means (such as a customer display).
4.3.7 Bar Code Reader – Mandatory Feature(s):
The Vendor shall propose a bar code reader that allows retailers the most
flexibility and efficiency such as providing a detachable bar code reader
giving it the ability to read different size and shape items (such as POS items,
bar coded instant ticket packs, ticket stock boxes), and in addition, instant
tickets in racks.
4.3.9 Player Self-Service Ticket Checkers – Mandatory Feature(s):
Commonly referred to by the Lottery as “Check-A-Tickets” or “CATS” shall
provide players with a method of checking their own draw game and Instant
tickets to see if they are winners. Player Self-Service Ticket Checkers shall
read all draw game and Instant tickets, including tickets from the current
Vendors.
4.3.10 Jackpot Sign Integration – Mandatory Feature(s):
The Lottery plans to keep and use approximately 620 jackpot signs. Vendor
shall describe how it will integrate and support the current jackpot signs.
4.3.11 Peripheral Interfaces – Mandatory Features(s):
Terminal shall interface with multiple peripheral units, including third party
units. Vendor shall describe how their terminal meets these requirements.
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Terminal shall interface with player self-service ticket checkers (“check-a-
ticket” units), customer displays, number display boards, Lottery owned
jackpot signs, and player advertising displays with room for growth.
4.3.12 Retailer Productivity and Accountability -- Specified Options(s):
Vendors are encouraged to describe their solutions to address improved
productivity and accountability of retail clerks such as the use of clerk IDs.
4.3.13 Diagnostics – Mandatory Feature(s):
Vendors shall demonstrate the capability of terminal diagnostics and
automatic recovery.
4.3.14 Environmental Fitness – Mandatory Feature(s):
Terminal shall meet safety standards such as Underwriter Laboratory (UL).
Terminals shall operate without degraded performance, in environments
where other electrical devices will share electrical circuits and wireless signals
with the terminal. Terminals shall be protected from electrical surges that
would damage the terminal.
4.3.15 Terminal Random Number Generator (Quick Pick) – Mandatory
Feature(s):
All terminals shall be capable of generating “quick pick” and partial “quick
pick” numbers for any game as requested by Lottery. Randomness shall be
certified by an independent company selected by the Lottery. The company
conducting the certification shall provide the Director of Security and Video
Lottery with the results of said certification and with an outline of the testing.
The Vendor shall be responsible for any expenses incurred for the certification
of the random number generators.
Should the software fail to produce random numbers as determined by the
independent certification company, or if any changes are required by the
Lottery, the Vendor shall be responsible for the necessary changes and any
additional cost involved with re-certification. All re-certifications shall be
subject to the same terms and conditions as the certification described above.
4.3.16 Audio Capabilities – Mandatory Feature(s):
Terminals shall be able to emit software-controlled, audible tones and alarms
with an adjustable volume. Terminals shall be able to emit musical sounds
with adjustable volume. Musical sounds, tones, alarms and volume levels
shall be determined by Lottery.
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4.3.17 Player Transaction Display – Mandatory Feature(s):
The Player Transaction Display is a player-oriented visual display that
communicates to the player the amount of the current sale. An advertising
message shall be displayed when not displaying player Transaction
information or have the ability to display simultaneously both an advertising
message and player transaction information. The Player Transaction display
shall have the ability to support animation.
4.3.18 Player Advertising and Game Board Displays – Mandatory Feature(s):
The Vendor will describe the size of the Advertising Display recommended
for each location. The Lottery's intent is to employ such devices to display
graphics and messages, which will change constantly, daily or weekly and
shall be downloadable to the Terminal (or a media box if offered as part of the
solution). The purpose of these displays is to gain the attention of the players
and to inform potential players of the jackpot value, promotions, etc. Content
for the units shall be managed through the Lottery management Terminals or a
Content Management solution. The Vendor may also propose additional
methods for creating and promoting content to take full advantage of this
medium. The Lottery requires the ability to cross promote on this medium and
follow with tracking for number of impressions. The Lottery shall be able to
traffic content by region, city, zip, chain and any other addressable
demographic. The Lottery would also schedule program content by
demographic, parts of day or time and Retailer type.
The display shall be suitable for displaying Keno and other similar type draw
games, advertising, jackpot information, alerts, promotions, and game
information to players within the store. Characteristics should include: flat
panel, flexibility of placement within the retail establishment, wireless
capabilities, sufficient cord lengths (e.g. 15 ft.), good visibility and sound
available through auxiliary speakers or through the Terminal. The display and
Terminal at a minimum should be capable of playing sound, static image files,
animations, and full motion high resolution video and dynamic slides. Vendor
shall fully describe the capabilities of all types of displays proposed. All
installations are subject to the Lottery’s acceptance and approval. Due to the
wide diversity of available space in Retailer locations, the advertising and
jackpot display unit shall be capable of mounting in multiple configurations
(pole, saddle, wall, window, etc.). Vendor shall describe the methods available
for mounting the display.
4.3.19 In-Lane Selling Solutions – Specified Option(s):
Some larger retailers generally require players to go through a second line
when they want to purchase Lottery tickets. The Vendor shall propose
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solutions that would allow the Lottery to sell its products in checkout lanes. At
a minimum, the Vendor shall propose solutions for support and integration of
the NASPL (North American Association of State and Provincial Lotteries)
API in the possible event of the API going live during the term of the contract.
4.3.20 Retailer POS Integration Solutions (Bring Your Own Device) – Specified
Option(s):
Retailers have their own POS or other retail system and would like to
integrate the purchase of Lottery tickets. The Vendor shall propose solutions
that would allow the Lottery to sell its products within a retailer’s POS or
other retail system.
4.3.21 Player POS Solutions (Bring Your Own Device) – Specified Option(s):
The Vendor shall propose solutions such as tethering that would engage
players to purchase and play Lottery games while at the retailer location.
Transactions shall go through the retailer terminal or connection to the gaming
system. Internet gaming is not yet allowed in the State of South Dakota.
4.3.22 Player Solutions (Beacon) – Specified Option(s):
The Vendor shall propose a secure beacon solution to engage the player by
using the player’s mobile device to display special offers or additional
information for specific products, promotions or services that the Lottery is
currently offering.
4.3.23 Spare, Training and Special Events Terminals and Staffing of Special
Events – Mandatory Feature(s):
The Vendor shall supply all spare terminals, peripherals and parts needed to
maintain an efficient, complete gaming system at no cost to the Lottery. The
Vendor shall supply all terminals, peripherals and communications to conduct
retailer training around the state.
The Vendor shall also supply terminals, peripherals and communications to
support special event locations around the state, such as fairs, sidewalk sales,
tradeshows, and so forth as requested by Lottery. NOTE: There may be
occasions when the Lottery may simultaneously participate in multiple special
events. Upon request of the Lottery, the Vendor shall provide at least one
qualified staff person (for each event if the Lottery is simultaneously multiple
special events) who will work at all promotional events assisting selling
Lottery tickets and maintaining and servicing terminals.
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Vendor shall supply wireless router solution with diverse wireless provider
capability for use at all above events as the terminal connection to the primary
and secondary wireless network.
SPECIAL NOTE: Vendors are also specifically advised that some of said
events are conducted indoors wherein radio and/or satellite service is not
viable. Vendor should describe its ability and methodology to service those
events, or explain why it is unable to service those events.
4.3.24 Reports – Mandatory Feature(s):
Terminals shall provide a robust series of reports for retailers that meet all
their needs. The Vendor shall describe the reports and how it will meet this
requirement.
4.3.25 Other Equipment –Mandatory Feature(s):
The Lottery may be authorized to own, operate, or manage new games,
facilities or types of games. If this occurs, the Lottery reserves the right to
negotiate with the Vendor for additional equipment and/or software.
4.3.26 Consumables – Mandatory Feature(s):
The Vendor shall supply adequate consumables at no additional cost to the
Lottery. The Vendor shall provide a copy of the most recent and applicable
laboratory or other test reports and other certifications (if certifications are
available) addressing the security, and durability of terminal paper and ink
against practical compromise by reasonably comprehensive technical efforts.
Submit samples of the terminal ticket paper stock and play slips of the quality
being proposed.
4.3.27 Jackpot Signs – Invited Option(s):
The Vendor shall propose an electronic jackpot sign that would be most
appropriate for the Lottery for retailer locations that currently do not have one.
The Vendor shall maintain and install in-store wireless signs capable of
displaying information regarding jackpot amounts, to be automatically
updated as jackpot amounts are updated. Wireless signals shall be designed so
as not to interrupt or interfere with any electronic devices otherwise operated
in the store or carried by store customers or employees in the store.
4.3.28 Installation, Relocation and Disconnection – Mandatory Feature(s):
Vendor shall be responsible for planning, handling and actual placement of an
appropriate system at each Retailer location. There shall be no charge for
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installation, relocation, disconnection, or removal of any equipment or
service. Installation of new Retailers shall take no more than five (5) calendar
days from the date requested by Lottery; however, in the event of an
emergency or other exigent circumstances as may be determined by Lottery,
the Vendor shall make its best effort to install the necessary equipment and
activate new Retailers within one (1) calendar day from the date requested by
Lottery. Equipment removed may be re-used.
4.3.29 Terminal Type Mobile Terminal – Specified Option:
Mobile Terminal support capabilities shall be available for a wireless
Terminal with the same functionality as a Retailer Terminal to be used by the
Lottery.
4.3.30 Terminal Type Portable Hand Held Terminal – Specified Option(s):
Vendor shall describe Portable Hand Held Terminal and printing technology
that may be carried around or other options in keeping with current and
evolving technologies that the Lottery may desire at current or future times.
4.3.31 Player Activated Terminals/Vending Machines – Specified Option(s):
The Vendor shall propose player self-service device that utilizes state-of-the-
art technologies to provide attractive, easy to use, efficient, scalable, and
reliable delivery of games for all players. The device shall support all current
and future Lottery Instant and draw games. Also the system shall provide
content and additional games that attract players and ultimately generate sales.
The responding Vendor shall describe in detail the functionality of the
proposed device.
4.4 Communications Network – Network Design – Mandatory Feature(s):
The Vendor shall provide and operate the communications network required to
connect all components of the On-line Central System, with appropriate redundancies
to assure network survival in the event of a major outage. The Vendor shall provide
the interface of the On-line Central System with the Lottery LAN/WAN.
Certain Lottery-operated processes, e.g. ICS and SD Lottery Acclaims System rely on
high-speed TCP-IP communications with the On-line Central System. To avoid
delays from routing the traffic through the Lottery’s LAN/WAN, the Lottery will
require secure connections between the central computer and the equipment used in
these processes. Vendor shall provide the interfaces to all Lottery downstream
systems and applications as specified by the Lottery.
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South Dakota Bureau of Information and Telecommunications standards and any
amendments or replacements thereto shall be met or exceeded for these
communications, subject to Lottery approval.
4.4.1 Network Design – Mandatory Feature(s):
The Vendor shall accurately and comprehensively describe the design of its
proposed communications network. The proposed communications network
shall include all technologies required to connect equipment to all retailer
sites. The network shall deliver all retailer traffic to the PDC and BDC
simultaneously and in real-time. The Vendor shall be responsible for
connecting the PDC/BDC to the Lottery Headquarters facility for interface
with the Lottery’s real time feeds. The Vendor shall provide the necessary
communications service between its data centers for coordination and
recovery purposes.
4.4.2 Vendor Networks – Mandatory Feature(s):
The Vendor’s production, test systems, and administrative LAN/WAN shall
be independent of each other.
4.4.3 Retailer Connectivity Installation – Mandatory Feature(s):
The Vendor shall describe its proposed solution to retailer connectivity and
installation. Each Vendor is encouraged to propose a creative solution that
meets the Lottery’s objectives of efficiency and cost effectiveness. Each
proposal shall include a description of all proposed security measures. The
Vendor shall provide one or more examples of where it has this solution
currently deployed.
4.4.4 Fault Tolerance – Mandatory Feature(s):
The Vendor shall describe its Fault Tolerance and System Redundancies
Action Plan. The proposal shall describe how the Vendor will conduct
problem resolution on all issues identified by any retailer or Lottery employee.
It shall describe the process for monitoring network components and terminals
and supplying information about failures within the network. The Vendor
shall provide one or more examples of where it has this solution currently
deployed.
4.4.5 Communication Encryption Requirements – Mandatory Feature(s):
The Vendor shall describe its proposed solution to communications
encryption. All data communications that are external to secured facilities
shall be encrypted with an encryption methodology at a level approved by the
Lottery. This includes, but is not limited to, the communications between the
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PDC, the BDC, and the Lottery. The Lottery shall approve the Vendor’s
encryption mechanism that shall meet WLA, MUSL, ISO /IEC 27001,
ISO/IEC 27002, and NIST standards. The Vendor shall describe how it will
meet the proposed encryption standard, and provide an example of where it
has this level of encryption currently deployed.
All applications and servers requiring authentication must support the ability to
enforce complex passwords, minimum life of password, maximum life of
password, and minimum iterations of passwords.
4.4.6 Communication Outage Handling – Mandatory Feature(s):
The Vendor shall describe its solutions to communications outages. The
Proposal shall describe notification processes.
4.4.7 Protocol Requirements – Mandatory Feature(s):
The Vendor shall describe its proposed solution to provide secure
communication protocols.
4.4.8 Non-responding or Failing Terminals – Mandatory Feature(s):
The Vendor shall monitor terminals and its components and describe its
proposed solution to non-responding or failing terminals or components. The
Proposal shall include, at a minimum, a description of triage and escalation
processes and timeline.
4.4.9 Diverse Terminal Communications– Mandatory Feature(s):
The Vendor shall ensure that an agreed upon number of terminals are
communicating on a separate means of communication, whether it be by
different mediums (VSAT and IP Cell, for example), or simply by different
networks of the same medium (utilizing different satellites, for example).
4.4.10 Performance Management – Mandatory Feature(s):
Ongoing monitoring of the network components and terminals give the Vendor
information about performance and service outages with the network. The Lottery
expects the Vendor to propose a proactive solution that initiates corrective action
as soon as the Vendor detects an outage (rather than waiting to respond to a
retailer-initiated trouble ticket).
The proposed network performance management protocol must anticipate and
provide solutions to communications network performance management issues
including, activities to restore services, elimination of chronic failures, correction
of network latency issues, second- and third-Level service solutions for
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networking issues, diagnostic tools needed for complex problems; and detection,
isolation, prevention and correction of performance issues.
The Vendor must provide an example of where it has this protocol, or a
comparable protocol, currently deployed. The Lottery requires a solution for
monitoring the status of the Vendor’s gaming system and communications
network in real time via a remote monitor that will be located at Lottery
Headquarters.
During the daily operational sales period, the Vendor’s system must not be
inoperable for more than five (5) minutes per day. Illustrations of this downtime
are identified as, but not limited to, inability of tickets to be sold through a
terminal supported by the system, the on-line cashing function not being operable,
the on-line claim processing function not being operable; and/or the drawing
process not being operational.
4.4.11 Degraded Performance – Mandatory Issues
During the daily operational sales period, the system shall be degraded for no
more than five (5) minutes per day. Under this contract, degraded performance
occurs when five percent or more of retailer terminal-based requests are not
processed within ten (10) seconds from request input, the system can perform
some, but not all, on-line and instant functions (for example, the production of
retailer reports or the broadcast of terminal messages), data is not recording on 2
media and remote logging before ticket issuance or any system component (for
example a front end processor) is down or operating below required response
times, even though the rest of the system is working.
4.5 Software Applications and Files
4.5.1 Drawing Information and Controls – Mandatory Feature(s):
At the time of contract implementation, the Lottery anticipates that it will be
conducting or participating in scheduled drawings Monday through Saturday
between approximately 8:30 p.m. and 10:00 p.m. CTZ as follows:
Monday .....................Lucky For Life
Tuesday .....................Mega Millions
Wednesday ................Powerball, Dakota Cash, Lotto America
Thursday ...................Lucky For Life
Friday ........................Mega Millions
Saturday ....................Powerball, Dakota Cash, Lotto America
The Vendor shall conform to this drawing schedule, and to any future drawing
schedule determined by the Lottery. Vendors shall describe their ability to
satisfy the following mandatory requirements:
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4.5.1.1 Wager Suppression – Mandatory Feature(s):
The system shall be able to shut off and resume all wagering or wagering on
each game independently. The system shall be able to vary the number of
drawings per game, per day, per week and/or the days the drawings are
conducted. It shall be able to determine the number of winners for each prize
level for pari-mutuel games within 15 minutes after a drawing.
4.5.1.2 Game Draw Process – Mandatory Feature(s):
The Proposal shall describe the process of closing games, conducting game
drawings, entry of winning numbers, and readiness to pay winning tickets.
The Proposal shall describe the process to enter drawing information and
verification in terms of modification of game status (game open, game close,
game in drawing status etc.), winning number entry, winning number
confirmation, entry of game/drawing payout status, entry of jackpot amount,
entry of carryover amount and entry of prize amounts for pari-mutuel games.
The proposal shall also describe the process to change from cash prizes to
annuity prizes after a game has been placed in "pay status" based upon a
winner selection.
4.5.1.3 New On-line Games – Mandatory Feature(s):
The Vendor shall support new On-line games, such as traditional draw games or
fast-play games. The Proposal shall describe the process of introducing new
games to the Lottery’s portfolio, and it shall describe the library of games which
the Vendor is licensed to provide.
4.5.1.3 Monitor Games – Invited Option(s):
The Vendor is invited to propose new monitor games, such as keno, that they
believe would provide the best value and return-on-investment for the Lottery.
The Vendor shall describe all additional equipment or software changes that may
be required to implement the proposed games.
4.5.2 Random Number Generators for Future Draw Games – Invited
Option(s):
4.5.2.1 RNG Equipment – Invited Option(s):
The Vendor in invited to propose all equipment, software, security, access and
activity logging and communications necessary to produce computer
generated random draw numbers for all future draw games (including monitor
games), for which the Lottery draws (would draw) its own numbers. Subject
to Lottery approval, six (6) processors and associated monitors (3 at PDC, 3 at
BDC) would be supplied for the sole purpose of generating and displaying
random numbers unless the Vendor has another proposal acceptable to
Lottery. The screen display format of the monitor shall be subject to Lottery
approval.
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4.5.2.2 RNG Software Certification – Invited Option(s):
Software utilized by the processors shall be certified at the Vendor’s expense
by an independent testing laboratory selected by the Lottery. The company
conducting the certification shall provide the Director of Security with the
results of said certification and with an outline of the testing. Source code and
object code for the random number generators shall be retained by the
Vendor’s corporate office in a secure place. At the request of the Lottery, the
Vendor shall provide the source code directly to the independent testing
laboratory for certification. The Vendor’s corporate office shall not release
the source code or the object code for the random number generators to the
Vendor site or any other person or entity without the express written approval
of the Executive Director of the South Dakota Lottery.
RNGs shall be recertified as requested by the Lottery.
The random number generators shall not redirect or reanalyze a random
number chosen based on a previous outcome of a game.
4.5.2.3 Continuous RNG – Invited Option(s):
The random number generators shall run continuously even while not being
accessed by the Vendor’s gaming system.
4.5.2.4 RNG Seeding Process – Invited Option(s):
The seeding process for generating random numbers shall be sufficiently
complex to prevent identical seeds being produced if multiple processors are
powered on at the same time.
4.5.2.5 RNG Failure – Invited Option(s):
Should the software fail to produce random numbers as determined by the
independent certification company, or if any changes are required by the
Lottery including new and changed games, the Vendor shall be responsible for
the necessary changes and any additional cost involved with re-certification.
All re-certifications shall be subject to the same terms and conditions as the
certification described above.
4.5.2.6 RNG Check Sums Testing – Invited Option(s):
Software used for routine testing of the check sums for the RNG’s shall be
provided to Lottery Security.
4.5.2.7 RNG Logs - Invited Option(s):
The RNG should produce indelible logging to be accessed by Lottery
Security.
4.5.2.8 RNG Logging - Invited Option(s):
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Random numbers drawn shall be communicated to both the Online Central
System and the ICS simultaneously with a real-time verification that both
systems have logged identical numbers. Should those numbers not match, an
alert shall be sent to Lottery Security.
4.5.3 Transaction and Ticket Protections – Mandatory Feature(s):
The Vendor shall describe the controls built into its system and operation that
assure transaction and data integrity.
4.5.4 Transaction Storage Redundancy – Mandatory Feature(s):
The Vendor lottery gaming system shall simultaneously record all draw
gaming transactions to the primary system, the backup system(s), and a
remote logging file that will be input to the Lottery’s ICS. It shall verify that
the transaction was recorded in all of the above stated files prior to transaction
completion. Vendor shall describe their verification method.
Backup media shall be retained for each current Lottery fiscal year to date,
and for five previous Lottery fiscal years. Backup media shall be reliably
recoverable.
4.5.5 Console Records – Mandatory Feature(s):
All commands executed by the system or operator, and any system warnings or
problem messages, must be immediately printed on a console log and copied to an
unalterable electronic file that is immediately updated or to two separate
unalterable electronic files with one file being recorded on a system other than the
host systems hard drive. A copy of this printout or electronic file must be
provided to the Lottery upon request. The console log shall contain all activity
entered or received through the operator's console and shall include such items as
system operation, time of inquiry, access code of inquiries, reason for inquiry, etc.
The Vendor must provide an alert method, which is not strictly dependent on an
operator watching a screen (such as a pager or other electronic device that is
routed to at least one person on site and up to two additional people off site) as
problems occur. The Vendor must describe how it will satisfy this requirement.
The Vendor is responsible for retaining all records and logs in an unalterable
state, for audit purposes, for the current Lottery fiscal year to date and the prior
Lottery fiscal year.
4.5.6 Game Monitoring – Mandatory Feature(s):
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The system shall include real-time monitoring of gaming transaction traffic
and system utilization. Outputs shall include a graphical form.
4.5.7 Back Office System – Specified Option(s):
4.5.7.1 Back Office Replacement – Specified Option(s):
The Vendor shall replace the Lottery’s current back office system with a
robust full functioning back office system required to run a successful lottery.
The Vendor shall describe in detail all components and work flow of the back
office system. The Vendor shall perform a business analysis on current
processes and enhance the system to accommodate Lottery needs.
4.5.7.2 Back Office Instructions – Specified Option(s):
The Vendor shall provide detailed step-by-step instructions, for both users and
managers, on how its products perform data entry, customizable searches, data
mining, and reports (standard, customized, management, and ad hoc) with
emphasis on how its products facilitate efficient operations.
The “how to” should be explained and the material should be presented in a
manner that clearly and concisely explains the security considerations,
capabilities, and the functionality of the product(s) from the perspective of the
users and managers.
Emphasis should be placed on the logical connectivity within the functional
categories and/or departments listed that will enhance the Lottery’s overall
business operations and productivity. The Vendor shall show the overarching
architecture for each of the back office functional areas and demonstrate how
the different departments/organizations are interconnected. The intuitive
nature of the work-flow, the flexibility of the work steps, the look, and
number of screens needed to accomplish critical tasks, and the user-friendly
aspects of the applications shall be explained to demonstrate that the Vendor
is proposing a first-class solution for the Lottery’s business needs.
4.5.7.3 Back Office Reports – Specified Option(s):
The Vendor shall include outputs e.g., generated reports, spreadsheets,
databases, or other outputs based on the needs, cross-referenced to the
business operations being performed in association with the report(s) that it
believes demonstrates how the Vendor’s product(s) will satisfy the business
needs of the Lottery in an efficient and timely manner. The Vendor should
highlight any initiatives or tools that it feels would better the Lottery’s
business needs e.g., intuitive fraud detection systems, exportability of reports,
etc.
4.5.7.4 Required Business Functions – Specified Option(s):
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The Vendor shall support business functions that are currently managed
through the Lottery’s Back Office System including but not limited to:
4.5.7.4.1 Claims and Payments – Specified Option(s):
The Vendor shall describe the operations for the accurate processing and
the recording of all activities necessary to issue a paper check or other
payment methods, or execute an electronic funds transfer as well as
process non-cash, merchandize prizes. The software shall ensure that
every transaction’s details are maintained regardless of disposition (e.g.
voided; replaced; reprinted; etc.) or changes to a claimant’s citizenship
status or Tax Payer Identification Number. Dual approval and/or other
security procedures shall be inherent in the software design to allow for
manual claims processing (including merchandise prizes) or alterations
during the processing of a claim, or after a check has been issued. The
software shall send a warrant file to the State Accounting System.
The software shall allow Claims Center staff to print checks individually
or in batches, using the Lottery’s check stock specifications. The software
shall also produce tax withholding information and print the claimant’s
name and address on the checks, as required by Lottery. Every check
shall be accounted for, in sequence, on the check register and check
information shall be maintained if a claim is destroyed or reprocessed.
The software shall accurately record the income tax withholding as
required by applicable law. It must have the ability to print an IRS Form
W2-G immediately following the printing of the claimant’s check. The
claims staff shall have the ability to issue a separate W2-G after the claim
has been processed, as requested. The software shall also have the ability
to produce W2-Gs for multiple claimants for a single claim, if an IRS
Form 5754 is presented.
The Vendor’s System shall have the ability to manage debt set-off from
prize payments for certain identified debts owed to government agencies.
The system shall have the ability to check the South Dakota debt set-off
file during the claim process and deduct the amount plus any fees found
from the payment amount. Debt set-off should be checked for all prizes on
a single claim of $100 or greater (as determined by the Lottery) including
merchandise prizes. The Vendor’s System shall provide the ability to
perform this function for all types of prizes and prize payments. The debt
set-off information will be provided to the Successful Vendor in a format
determined by the Lottery.
All claims processed shall be checked against the database of ineligible
players, which is updated and maintained by Lottery Security.
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The Vendor shall be available on an on-going basis to advise the Lottery
on how to fully utilize the available software features or controls to ensure
the integrity of Lottery claims processing operations. The software shall
contain internal controls, security features, auditing tools, and/or other
measures to prevent and detect fraudulent or improper claim payments.
Software security or other design features shall limit the opportunity for
identity theft or other improper use of a claimant’s PII (Personal
Identification Information).
Terminals, scanners, and other equipment needed, including back-up
inventory, at the Claims Center(s) are in addition to those allocated for use
in retail outlets and shall be provided, repaired and/or replaced by the
Vendor at no additional charge to the monthly fee.
4.5.7.4.2 Retailer Management – Specified Option(s):
1. Retailer Life Cycle
a. The Gaming System will include all functionality to maintain
the system of record of all retailer information that will be
jointly managed by the Vendor and the Lottery appropriate to
the business function. Certain fields will require encryption at
Lottery’s direction. The Vendor will provide and maintain a
workflow management system which supports the Lottery’s
business process through the entire lifecycle of retailer
management. The workflow management system shall include
an electronic document management capability to support the
exchange and tracking of forms and other documents used in
the Retailer Management and other business processes. This
system will include, but not be limited to; Retailer Application
work flow and Status; Retailer Background Review; ADA
compliance; Retailer Banking Settlement; Terminal
Provisioning; Retailer Training Status; Suspensions;
Reinstatements; Change of ownerships; Terminations; and
Reactivations.
b. The back office system will be the system of record. The
sources of information entry will be determined by the
Lottery. This system may be used, without limitation, by the
Lottery for any of its business processes.
2. Retailer Accounting.
a. Retailer EFT transactions and IRS filings. The Vendor shall
support combined Instant and terminal game product
accounting and Retailer accounting activity with all sales and
validation activity detailed by game.
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b. The Vendor shall provide a real-time feed to the Lottery’s
Retailer Portal which will send and receive data to the gaming
system.
c. The System shall have the capability for multiple recurring
and one-time fees and credits configurable by the Lottery for
an individual or retailer group. These fees and credits shall be
able to be temporarily or permanently set differently from the
default.
d. Alternative Sales Commission. The System shall have the
ability to calculate and pay commissions based on sales tier
and period as defined by the Lottery.
e. Ability to transfer retailer accounting information to retailers
in agreed upon formats (flat file, csv, etc.).
3. Retailer Portal Alternative The vendor may support interfacing with the current South Dakota
Bureau of Information and Telecommunications hosted retailer
portal as an alternative to hosting a new retailer portal. If this
option is chosen, the vendor shall provide the API’s.
4.5.7.4.3 System Interfaces – Specified Option(s):
Interfaces shall be automated, encrypted and formatted by the
Vendor according to interface specifications. The Vendor shall
be responsible for the successful and verified transfer and
integration of the files/data to the following systems:
a. Sales Force Automation
b. Retailer Portal
c. RMI (Retailer Market Initiative)
d. State of South Dakota
e. Bank(s)
f. ICS
g. Lottery.com
h. Players Club sites
i. Third Party Delivery Vendor (e.g. FedEx, UPS)
j. Others as determined by the Lottery
4.5.8 Instant Game Support – Specified Option(s):
The Instant Ticket accounting system shall consist of all functions required to
manage the Life Cycle of Instant Games, including but not limited to,
inventory management, game management, Ticket validation, order entry,
ticket distribution and ticket and game accounting. The Vendor shall describe
in detail the Instant Ticket Management process.
4.5.9 Instant Ticket Validation Requirements – Specified Option(s):
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The gaming system shall provide a secure, real-time ticket validation
capability via an authorized ticket validation entry point as determined by the
Lottery. e.g., ticket information scanned or entered via a Retailer Terminal is
immediately evaluated by the gaming system, the ticket status is updated, and
the result returned to the Terminal. If the ticket is a winner, the result shall
include the prize amount or other messages as determined by the Lottery.
4.5.10 Database Management – Specified Option(s):
The Vendor shall provide a stable, redundant, robust application and database.
The Vendor shall monitor, react to and resolve application and database alerts
and alarms. The Vendor shall ensure database integrity, manage and maintain
database structure and user access. Lottery access to databases shall be
limited to Web, Menu or GUI driven interfaces. Lottery staff shall not have
the ability to change database structure or change application level code. All
routine and ad hoc analyses conducted by the lottery shall be conducted
through canned reports or exportable data and shall not impact, transform,
append, or in any other way alter the underlying database, its tables or views,
or its data structure.
4.5.11 Database Reporting Capabilities – Specified Option(s):
The Vendor shall enact real-time reporting. All data shall be extractable and
shall be in a form and format facilitating export to analytic tools or reporting
tools such as, but not limited to, Excel, Access, PDF, HTML, text format
(.txt), Comma Separated Values (.csv), Tab Separated Values (.tab) or other
similar formats.
The system’s reportable data shall be available to Lottery to schedule,
generate and print reports. This may be in the form of actual data or it may be
in the form of views of the data. The Lottery will determine the format of the
input and report data (e.g. to include commas or not).
The Vendor is responsible for the custody, maintenance, daily updates and full
documentation via data dictionary (dictionaries) of such database(s) and views
which shall contain names of tables / views and elements as well as meta-data
related to the system and its files/views. The Vendor shall provide and
maintain a mapping of all database elements and their relationships. Such
documentation shall be provided to the Lottery at inception and updates of
same shall be integrated into change management processes.
4.5.12 Database Reporting Tools – Specified Option(s):
The Vendor shall supply a robust reporting system and provide all standard
reports. The Vendor shall provide additional reports as required by the
Lottery. The Lottery requires types of reporting for: Scheduled Reports, Ad
Hoc Reports, Analytics and Business Intelligence. The Vendor shall ensure
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the data is sufficient for the Lottery’s business needs. The Vendor shall also
allow access to the data for Lottery employees to create and run custom
reports through the Vendor supplied Business Intelligence or through a third-
party or Lottery operated Business Intelligence program.
4.5.13 Sales Force Automation- Invited Option(s):
The Vendor shall propose a Sales Force Automation tool that allows the
Lottery to have access to sales data, and Instant Ticket inventory information
for Retailers. This information should be displayed in both data and graphical
formats, making it easy for the Lottery to utilize the information when talking
to Retailers regarding sales trends. In addition, the Vendor shall supply and
host all resources needed to run the production and test environments.
4.5.14 System Backups – Mandatory Feature(s):
Data shall be retained by the Vendor to provide the ability to completely
restore the Central System. The Vendor shall describe its Backup and
Recovery processes and procedures, including testing and verification.
Backups shall consist of daily incremental backups of the database and ability
to perform partial and full back up procedures on the system while system is
live and managing transactions. In other words, all backup procedures shall be
executed while system is live and no downtime incurred as a result of backup
procedures.
4.5.15 Software and Configuration Management – Mandatory Feature(s):
4.5.15.1 The Proposal shall describe the Vendor’s capability for
maintaining and modifying software once it becomes operational and for the
development and support of future software needs. The Proposal shall include
an appropriate discussion of system development methodologies, data
administration and documentation methodologies, development tools and
configuration management methodologies. Descriptions of the methods
employed (i.e. forms, procedures, tools, etc.) for incorporating these
methodologies into the development life cycle are requested for evaluation.
4.5.15.2 The Game Load file shall be delivered encrypted and the Game
load file stay in an encrypted form during the Game Load Process and remain
encrypted after the Game load completes. The Vendor shall provide and
support a Game Load “Debug” tool for Lottery to use in the event the
encrypted Game Load has errors or failures in the load process. This Debug
tool will allow the Lottery to troubleshoot Game Load issues without the need
to decrypt the encrypted Game Load File.
4.5.15.3 The Vendor shall provide a CMDB (Configuration
Management Data Base) tracking tool.
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4.5.16 Remote Access Security Requirements – Mandatory Feature(s):
The Vendor shall describe its method for secure remote access. The system
shall provide tools to administer access control. The Vendor shall describe in
detail system access control tools providing security measures and practices
that include, but are not limited to, passwords and user access levels based on
individual employee’s job duties and ‘need to know’ requirements. The user
access levels shall be configured and controlled by the Lottery to allow for the
division of responsibilities to prevent inappropriate access to sensitive data
including, but not limited to, PII. If the Vendor’s back office application
provides inadequate levels of access control and/or segregation of duties, the
Vendor agrees to modify its back office interface as required by the Lottery.
4.5.17 Instant Ticket Order Telemarketing System – Specified Option(s):
The Vendor shall propose a System to support Telemarketing, predictive
ordering and retailer account service functions and services. The system for
the telemarketing staff shall employ mechanisms to promote efficiency and
accuracy.
4.5.18 Instant Ticket Order Telemarketing System Staff - Specified Option(s):
The Vendor shall propose staff to order Instant Tickets using the proposed
Instant Ticket Order Telemarketing System. Costing shall be broken out by
staff function.
4.5.19 Instant Ticket Order Fulfillment, Packaging and Warehouse System –
Specified Option(s):
The Vendor will propose a system to equip and perform the warehousing and
order distribution function as well as full and partial pack return processing,
the storage and distribution and return of Terminal Paper stock, play slips and
promotional items. Packing and distribution functions include filling orders,
ticket packaging, documentation, tracking, and security and destruction of
unsold, returned or unused tickets, and Terminal Paper stock. The Vendor will
pay all shipping charges for Instant Tickets, including returns and
replacements. The Vendor will provide an application to support warehousing,
physical inventory control, packaging, distribution and real- time shipment
tracking. The System shall protect information regarding the retailer location
of specific packs. The system shall employ mechanisms to promote efficiency
and accuracy.
4.5.20 Instant Ticket Order Fulfillment, Packaging and Warehouse System Staff
- Specified Option(s):
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The Vendor shall propose staff to fulfill Instant Ticket orders using the Instant
Ticket Order Fulfillment, Packaging and Warehouse System. Costing shall be
broken out by staff function. In the proposal, include the role that current
Lottery sales representatives might play in this system, or what duties the
system may relieve the representatives of.
4.5.22 Retailer Portal – Specified Option(s):
The Lottery is currently using a Retailer Portal maintain by the South Dakota
Bureau of Information and Telecommunications. The Vendor shall propose a
Retailer Portal that provides retailers with on-demand and scheduled reporting
of metrics related to their Lottery product category. This includes both Draw
Game and Instant ticket sales, inventory tracking, financial statements and
other reporting in flexible formats that facilitate import to retailer’s back
office accounting and reporting systems.
4.5.23 Alternative Prize Payment from Claims Process – Specified Option(s):
The Lottery is interested in keeping up with Player conveniences and would
like the Vendor to propose alternative ways Players can receive their
winnings such as EFT and other electronic payments.
4.6 Gaming Software Security and Control Features – Mandatory Feature(s):
4.6.1 The hardware, software, and communications shall be operated so that:
4.6.1.1 The Vendor shall describe internal access control for all back office
applications, providing security measures and practices that include,
but are not limited to, passwords and Vendor and Lottery user
access levels based on individual employee’s job duties and ‘need to
know’ requirements. The Vendor and Lottery user access levels
shall be configured and controlled by the Lottery to allow for the
division of responsibilities to prevent inappropriate access to
sensitive data including, but not limited to, PII. If the Vendor’s
back office application provides inadequate levels of access control
and/or segregation of duties, the Vendor agrees to modify its back
office interface as required by the Lottery.
To facilitate The Lottery’s internal access control
audits/investigations, the software shall create the necessary audit
trail logs for all additions, deletions or modifications to all records.
In essence, designated Lottery personnel shall be able to research
the “who, when and what” of any of the above mentioned data
alterations. The Vendor agrees to follow Lottery guidelines for
record retention of the aforementioned audit trail logs.
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4.6.1.2 Transactions shall not be tampered with or appear multiple times on
system files. The Vendor shall employ methods and procedures
which prevent unauthorized access or tampering with any part of the
system to insure overall integrity of the system and games. Security
procedures shall include, but should not be limited to, internal
control procedures applicable to system and terminal operation,
computer virus detection and prevention, draw game ticket
preparation, distribution and accountability. The Vendor shall
employ computer system file security procedures and password
control and encryption keys. The Lottery reserves the right to
review any and/or all system narratives, source program listings and
operational procedures to assure valid system integrity
4.6.1.3 Wager tickets, exchange tickets, and validation receipts shall not be
duplicated on retailer terminal equipment.
4.6.1.4 The Vendor shall immediately alert the Lottery when a Lottery-
specified liability level has been reached by any number
combination in any set payout game.
4.6.1.5 The system shall be capable of suspending play on specific numbers
as required by the Lottery in any set payout game.
4.6.1.6 The Vendor shall describe its ability to restrict the entry of system
commands to the system console. The Vendor shall provide
definitions of all system codes and messages that could appear on
the log file. The Vendor shall assist the Lottery in reviewing and
auditing the log file as requested.
For audit purposes the Vendor shall be responsible for retaining all
records and logs in an unalterable state for the current Lottery fiscal
year to date, as well as the immediately preceding Lottery fiscal
year.
4.6.1.7 The Vendor shall describe how it shall not be possible to manipulate
the system so that unauthorized transactions can be entered on the
system. This includes, but is not limited to invalid claims on
unclaimed winning tickets.
4.6.1.8 Source code compilers and software development tools shall not be
loaded or otherwise reside on the production gaming system.
4.6.1.9 All access shall be logged with a jump box or similar solution and
all unauthorized attempts shall alert and alarm to appropriate
monitoring organizations.
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4.6.1.10 A winning ticket shall not be validated or cashed more than once.
4.6.1.11 The Vendor shall describe how it shall protect and verify executable
programs on all production gaming systems.
4.6.1.12 Records of sold transaction data on the gaming system environment
shall exist in not fewer than two distinct physical locations in
separate geographic areas of the country to process (i.e. minimally
log) transactions. Each location shall receive and acknowledge
transaction board data prior to a ticket being allowed to print.
4.6.1.13 The Vendor shall describe how it will provide real-time monitoring
of gaming transaction traffic and system utilization (e.g., CPU, disk
usage).
4.6.1.14 The Vendor shall describe how it will simulate and load test all
types of transactions (terminal and system) for use in testing
software quality and performance.
4.6.1.15 The Vendor shall describe how Security measures will ensure the
integrity of winner files, unclaimed prize files, tickets redeemed by
retailers, and necessary supporting documentation.
4.6.1.16 For draw games, the Vendor shall also maintain dynamic pools for
the current draw and future draws for the draw games. The total
dollars played by game by play type shall be maintained for all
future draws. The current day's pools shall include all current day's
wagers as well as advance day wagers for that draw.
4.6.1.17 Lock Down Procedures - The Vendor shall describe in detail the
process and procedure to meet all MUSL approved alternative lock
down procedures.
4.6.1.18 The system shall maintain control of terminal software distribution
such that terminals are not able to run different versions of the
software simultaneously.
4.6.1.19 Only authorized retailer terminals, Lottery privileged terminals, and
games management terminals will be connected to the active
gaming system or its backup.
4.6.1.20 Retailer terminals located at the Vendor site or Lottery sites that are
not authorized by the Lottery to produce live game tickets for sale
shall be modified so that tickets produced by such terminals can be
easily identified by a method approved by Lottery security.
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Terminals located in the Vendor’s repair depots shall be secured and
not accessible to the operations staff at the Vendor site.
4.6.1.21 The Vendor shall comply with all multi-jurisdictional game group
(e.g. MUSL) rules, regulations, requirements, and game changes at
no additional cost to the Lottery.
4.6.1.22 The Successful Vendor shall provide the following process guides
for Lottery review and approval:
1. Change management;
2. Release management;
3. Performance management;
4. Service Level Monitoring and Reporting; and
5. Lottery security requirements as defined in this RFP and the
contract.
6. Policies, procedures and staff roles and responsibilities
associated with ITIL Continual Improvement concepts
associated with but not limited to Change Management,
Release, Validation and Control Management and Service
Delivery
4.6.1.23 The Lottery reserves the right to require at any time such further and
additional security measures as it may, in its sole discretion, deem
necessary or appropriate to ensure the integrity of the system or the
games.
4.6.1.24 The Vendor shall describe what features will be available that will
allow the Director of Security and Video Lottery to monitor retailer
sales activity and detect unusual increases in sales.
4.6.1.25 The Vendor shall develop, follow and maintain a written policy
regarding installing new or modified software on any production
system.
4.7 Internal Control System (ICS) - Mandatory Feature(s):
The Lottery currently runs an Internal Control System (ICS) system developed by
Elsym. The ICS independently processes all daily sales, validations, and coupons for
the purpose of auditing, balancing and reporting all game sales, and promotions. The
current Lottery ICS will be decommissioned as a part of system conversion process.
The Gaming System Vendor will act as the full integrator of a new ICS product and
service, through the use of a sub-contractor if necessary. The Lottery reserves the
right to select the ICS vendor for this contract period. The Gaming System Vendor
will ensure a seamless migration of current ICS features and functions as well as
enhanced features and functions of the new ICS product. ICS project plans for design
engineering, migration strategy and deployment execution will be developed jointly
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between Vendor, any ICS Vendor or sub-contractor and the Lottery. The ICS
administration of hardware, software and application is intended to be a function of
the Lottery, subject to MUSL rules and security concerns. ICS system, software and
application development will be a function of the ICS Vendor.
The ICS systems (primary, backup, and development/test) shall be located at secure
data centers in South Dakota. The ICS shall be designed as an active/active solution
where both primary and secondary ICS systems receive simultaneous real-time
transactions. The ICS solution shall be designed with automatic failover capabilities
and the test ICS shall be ready to take over as the ICS in the event the primary and
secondary are unavailable. The ICS shall be fully redundant with dashboard features,
reporting features, hardware/software/application fault management alarms and alert
features, user and system security access monitoring, RNG monitoring with indelible
logging and immediate alerts if winning numbers logged in the ICS differ from those
logged in the CGS and alerting features, along with all standard ICS Draw and Instant
Ticket functions.
4.7.1 Internal Control System (ICS) Application – Mandatory Feature(s):
The Vendor shall provide a trustworthy, secure ICS application providing
visibility and assurance that lottery operations are secure and comply with
Lottery and MUSL regulations, including but not necessarily limited to the
following requirements:
1. The ICS product shall ensure the Lottery has integrity ICS
controls, rapid audit capabilities, and accounting auditing features
and functions within the ICS application.
2. The ICS Vendor application shall support all Draw (online), and
Instant gaming transactions.
3. The ICS application shall independently track and record all online
wagers, perform verification and validation checks real-time,
ensure only valid wagers are being processed, verify winning
numbers, balance winner counts and shares, automatically generate
reports and automatically alert operators in real-time of potential
failures or threats.
4. Although the ICS Vendor is a sub-Vendor of the Gaming System
Vendor, the ICS Vendor shall advise the Lottery whenever there is
any matter affecting the functionality and/or the integrity of the
System or when there is a need for modification(s) to the ICS
system. Service level agreements, Vendor access, release
management, change management, incident and problem
management processes will be defined, agreed to and implemented
based on Lottery, Vendor, and ICS Vendor support policies,
methods and procedures. Software and hardware upgrades to the
ICS, as well as planned, emergency, break-fix changes, updates
and new features and services during the term of the Contract shall
be approved in writing by the Lottery prior to implementation and
in compliance with established change management processes.
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5. The ICS Vendor shall perform all necessary software
modifications to correspond with the Vendor’s software changes
due to adjustments to a game matrix or design at no cost to the
Lottery. The ICS Vendor at no cost to the Lottery shall maintain
stable and secure ICS software/application keeping current with
software upgrades, patches and security vulnerability updates. The
Lottery intends to be responsible for ensuring the hardware
platform the ICS resides on is likewise current in operating system
levels, hardware code levels and security related patches specific to
hardware components unless an alternative workable plan is
offered by Vendor and adopted by the Lottery.
6. Installation, all equipment, software, upgrades, “fixes”, and
maintenance relating to the ICS system and any features are
included in the fee paid by the Lottery to the Vendor. Nothing in
this section is intended to nor shall it establish a contractual
relationship between the ICS Vendor and the Lottery. At all times,
the ICS Vendor is, and shall remain, a sub-Vendor (or sub-
contractor) of Vendor.
7. The ICS shall meet regulatory requirements assuring that data
protection and privacy obligations are maintained for the Lottery
and gaming operator. The ICS must be approved and in use for
MUSL auditing and meet current as well as future MUSL Rule 2
(or its equivalent) requirements pertaining to ICS.
8. The ICS shall meet all Lottery and State of South Dakota Security
requirements and current as well as future encryption technologies
and requirements at no cost to the lottery.
4.7.2 ICS Start-Up - Mandatory Feature(s):
It is required that the ICS features be the first available during the conversion
process. Data that is “in use” during the conversion process shall be the first
secured and cleared for implementation into the new system. The ICS Vendor
shall assist the Lottery in converting and cleansing data from the current ICS
so that data will be accurate and correct on the new Gaming System and ICS.
4.7.3 Lock Down – Mandatory Feature(s):
The Vendor shall describe in detail the process and procedure to meet all
MUSL approved alternative lock down procedures.
4.8 Games and Marketing Support
4.8.1 Game and Product Support - Specified Option(s):
The Vendor shall describe marketing and/or product development services
relating to terminal-generated games (either in conjunction with or
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independent from instant games). The general scope of these services may
include, but are not limited to:
1. Strategic planning, product design, market research, and market
development and acquisition;
2. Game development;
3. Support for Lottery sales and promotional activities; and
4. Player loyalty programs, mobile device apps, merchandizing,
promotional items, and second-chance games for terminal-generated
games.
4.8.2 Third Party Integration – Mandatory Feature(s):
Vendors shall describe how they would integrate and support third party
systems such as loyalty program, ticketless transactions, draw games, etc.
Vendor will act as the single point of contact for all Third Party Vendor
issues, engagement and SLA agreements.
4.8.3 Additional Gaming and Non-Gaming – Invited Option(s):
Vendor is invited to propose Lottery-to-Player Capabilities, such as Database-
driven features (VIP, Loyalty, stored value, tracking capabilities, etc.).
4.8.4 Marketing Plan Development and Support – Specified Option(s):
The Vendor shall take an active role in sales and marketing in order to
increase long-term sales for the Lottery. The Vendor shall describe in detail
how they will support the Lottery in its on-going Marketing efforts.
4.8.5 Promotion Capabilities Explanations – Mandatory Feature(s):
The Vendor shall describe the Vendor’s promotion support capabilities and
provide details of the promotions included in the base price.
List and fully describe the types and results of promotions the Vendor has
fully implemented in other lottery jurisdictions. If any of these promotions
were designed with an unusually large scope or were fully implemented with
multiple components, then the Proposal shall include an explanation of the
Vendor’s abilities in these areas.
4.8.6 Additional Gaming Capabilities – Invited Option(s):
Although the Lottery does not currently offer non-traditional games, the
System shall be able, through hardware and software upgrades, as needed, to
support additional games not currently offered. Specific non-traditional
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capabilities offered by the Vendor may be described and/or may appear as
Invited Options.
4.8.7 Marketing Allowance – Mandatory Feature(s):
In addition to the technical commodities and services required above, the
Vendor will financially support the Lottery’s product development and
marketing efforts. As a minimum the Vendor’s support will consist of $25,000
per contract year. The allowance will be cumulative and spent at the direction
of the Lottery. All portions of said monies not used in any contract year may
be used in any subsequent contract year as the Lottery may determine in its
sole discretion. Furthermore, all amounts not utilized by Lottery for product
development and marketing efforts may at any time be utilized as the Lottery
may determine in its sole discretion.
4.8.8 Research and Development Program – Mandatory Feature(s):
The success of the Lottery depends on the availability of new products,
gaming features, and services. The Vendor shall support the Lottery in this
mission. The Vendor shall describe its resources, capability, capacity and
plans for maintaining a research and development effort in such areas as
gaming concept design/development, segmentation studies, retailer terminal
design, telecommunications, retailer network planning, and sales data mining.
4.8.9 Research and Development Allowance – Mandatory Feature(s):
In addition to the technical commodities and services required above, the
Vendor will financially support the Lottery’s research and development
efforts. As a minimum the Vendor’s support shall consist of $25,000 per
contract year. The allowance will be cumulative and spent at the direction of
the Lottery. All portions of said monies not used in any contract year may be
used in any subsequent contract year as the Lottery may determine in its sole
discretion. Furthermore, all amounts not utilized by Lottery for market
research, sales research, product research, or other related research and
development efforts may at any time be utilized as the Lottery may determine
in its sole discretion.
4.8.10 Retailer recruitment and retention – Specified Option(s):
The Vendor shall propose a plan to assist the Lottery in recruiting new
retailers and retaining existing retailers.
4.8.11 Sales Operations and Retailer Support Management– Specified
Option(s):
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The Vendor shall propose sales operations and retailer support management
services which include oversight and management of a sales team as well as
activities dealing with sales support to Retailers and the promotion and sale of
Lottery Products. Sales team functions can be generally categorized as
Retailer setup and training, supply and inventory management, and sales and
marketing support. Retailers are provided a variety of goods and materials to
support and sell South Dakota Lottery Products. These include point of sale
materials, supplies (e.g., play slips, Draw Game Ticket stock) and promotional
goods.
4.8.12 Electronic Play Stations – Specified Option(s):
The Lottery is interested in new and innovative electronic Play Stations to
catch customers’ attention, provide an entertaining area for players to easily
learn about and prepare to play Lottery games and to display Lottery
promotional materials and messages.
4.9 Facilities: Mandatory Feature(s):
The Vendor shall provide and operate at Vendor’s expense a Primary Business Site
(PBS) located in Pierre, South Dakota as well as a Primary Data Center (PDC) and a
Backup Data Center (BDC). The PDC and BDC may be located in-state or out-of-
state (but within the continental United States), or a combination thereof, as the
Lottery may determine is in its best interest. Vendors may submit alternative
proposals for location of the PDC. Regardless of the location selected for its data
centers, the Vendor shall provide a transport path between its primary and backup
Gaming Data Centers and the following: the Lottery Headquarters facility in Pierre,
South Dakota; the lottery offsite disaster recovery center (located in or near Pierre,
South Dakota, as determined by Lottery); and, each retailer site. The intent of this
requirement is to assure survival of the System in the event of a major outage. Each
of these transport paths shall support all of the gaming traffic needed between the
Gaming Data Centers, and between the Gaming Data Centers and the Lottery
facilities.
Lottery reserves the right to perform hardware acceptance of Lottery infrastructure
and facility and perform scheduled and unannounced visits to the data centers and
Network Operations Centers at any given time.
4.9.1 Physical Security Requirements at PDC, BDC and PBS – Mandatory
Feature(s):
The Lottery Director of Security and Video Lottery must approve the Physical
Security Plan, as well as the Information Security Plan. This includes approval of
the Security control system and door locks. Only persons authorized by the
Lottery may access sensitive or confidential data, software programs and system
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documentation, computer rooms, media storage, and any other area deemed by the
Lottery to warrant such authorization.
The Vendor’s facilities must be secured. Only authorized persons may be
permitted to gain entry into the facility, and authorized persons must be restricted
to authorized areas. If the facility is located in a State of South Dakota facility, the
Lottery will designate access authorization.
The Proposal must include, at a minimum, the following access control
requirements:
A. Facility entry and control points must be guarded by human or mechanical
means.
B. All key access doors must be self-closing and self-locking.
C. Physical access shall require 2 factor authentication.
D. Access logs must be provided to Lottery Security upon request and retained
for a Lottery defined length of time.
E. Recording-type closed circuit television must monitor all vulnerable and
sensitive areas. The Lottery Director of Security and Video Lottery shall have
access to recordings as well as the ability view the vendor camera's in real
time.
F. Sensitive areas must include, at a minimum, Host systems and the
communications equipment/workstations used to access Host systems.
G. All Vendor employees must receive, use and be easily recognized by a photo
identification badge.
H. All visitors and messengers must be logged in and out of the facility, and all
visitors must be escorted at all times while inside.
I. Access authority must be removed immediately upon any individual’s change
of assignment or termination.
J. The Vendor must give the Lottery a security system generated list of access
level(s) for all individuals with access to the facility. The Vendor must
promptly update this information when any changes occur.
K. The Vendor must maintain a current list and/or memorandum authorizing
access to those Lottery employees or other State employees who are
authorized to access the facility, along with each individual’s facility access
level(s).
L. At any time, personnel authorized by the Lottery may inspect any and all of
the Vendor or Vendors’ premises, to determine the degree of security and
operational compliance with the requirements of this contract. In addition,
authorized Lottery personnel may also have access to interview any Vendor or
sub Vendor employee or agent in conjunction with any audit, review or
investigation deemed necessary by the Lottery.
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4.9.2 Primary Business Site (PBS) Specifications and Location – Mandatory
Feature(s):
The Vendor shall maintain and operate a business office in Pierre, South
Dakota. The Vendor shall be solely responsible for any costs associated with
that facility (this includes costs related to procurement, utilities, building
services, design and construction). The physical facility shall comply with all
state and local building codes, laws, rules and regulations for facilities of its
type. The Vendor shall obtain proper facility permits and inspections.
4.9.3 PDC Site Specifications and Location: Mandatory Feature(s):
The PDC shall be located at an approved site within the continental United
States which shall be approved by the Lottery. The Vendor shall be required
to submit the following information to the Lottery: site design and layout
specifications; site location address, owner(s) name, facility exterior
photographs/drawings and a proposed floor plan.
The PDC may be in a consolidated data center if adequate security is
provided, access controls are in place and the computer systems are dedicated
to the Lottery. The Proposal shall include a detailed plan describing how the
Vendor plans to meet this requirement.
The vendor shall cover all expenses for up to four lottery staff to conduct an
onsite review of the PDC on a yearly basis.
4.9.4 Backup Data Center (BDC) Site Specifications & Location – Mandatory
Feature(s):
The BDC is a real-time functional duplicate of the PDC. It is geographically
separate from the PDC, to prevent a disaster from affecting both centers at the
same time. The BDC shall be located at a Lottery approved site within the
continental United States, subject to the same approvals as the PDC above.
The Vendor shall be required to submit the following information to the
Lottery: site design and layout specifications; site location address, owner(s)
name, facility exterior photographs/drawings and a proposed floor plan.
The BDC may be in a consolidated data center if adequate security is
provided, access controls are in place and the computer systems are dedicated
to the Lottery. The Proposal shall include a detailed plan describing how the
Vendor plans to meet this requirement.
The vendor shall cover all expenses for up to four lottery staff to conduct an
onsite review of the BDC on a yearly basis.
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4.9.5 Maintenance and Repair Center(s) – Mandatory Feature(s):
Vendor shall describe the maintenance centers and depots to be used to fully
support the terminal maintenance and repair program throughout the state.
4.9.6 Testing Facility – Mandatory Feature(s):
The Vendor shall describe in detail the QA Testing Facility to be used for
Acceptance Testing by the Vendor.
The Vendor shall be solely responsible for the procurement of the Testing
Facility. The Vendor shall be solely responsible for the costs of Testing
Facility design and construction. The Vendor shall be solely responsible for
Testing Facility equipment, utilities and building services expenses.
4.9.7 Compliance with MUSL Lockdown Alternative Standards – Mandatory
Feature(s):
Vendor shall describe how it will comply with all applicable MUSL lockdown
alternative standards.
4.10 Data Security Plan
4.10.1 Physical Security Plan – Mandatory Feature(s):
The Vendor shall describe the plan to ensure that adequate protective
measures are implemented for all IT computing resources. The purpose of
the physical security component of the IT security program is to reduce the
risk of data compromise due to physical break-ins or unauthorized access to
server resources. Proposals shall include descriptions of the following
physical security plan components:
4.10.1.1 The proposed physical security attributes for computer or
communications rooms;
4.10.1.2 The proposed facility access control;
4.10.1.3 The proposed data storage and communications controls;
4.10.1.4 The proposed off-site media storage;
4.10.1.5 The proposed data storage devices.
4.10.2 Data Security Plan – Post-Award Vendor Requirements – Mandatory
Feature(s):
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The Vendor shall submit a detailed Data Security Plan to the Lottery for
approval no later than May 1, 2019. The Vendor shall also describe how it
will keep the security plan up-to-date and in conformance with future
versions of these documents. The Data Security Plan shall be available in
hard copy and data format. At any time, personnel authorized by the Lottery
may inspect any and all of the Vendor’s or Vendors’ premises to determine
the degree of security and operational compliance with the requirements of
this contract. In addition, authorized Lottery personnel may also have
access to interview any Vendor or sub-Vendor employee or authorized
agent in conjunction with any audit, review or investigation deemed
necessary by the Lottery.
4.10.3 Additional Data Security Plan Requirements – Mandatory Feature(s):
Shared user accounts shall not be permitted. The Vendor shall describe how
it proposes to meet this requirement. All 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. When an employee is terminated the Vendor shall
immediately cancel that employee’s access rights.
Data must be encrypted in all transaction delivery protocols and remain
encrypted at all times. Game Loads shall be delivered in an agreed to and
approved method as encrypted, remain encrypted throughout the game load
process and after Game load is completed. Vendor shall provide a Game
Load debug tool on the Gaming System allowing Game Load Operators
and Security to troubleshoot and resolve Game Load related issues while
data is maintained in an encrypted state.
The Vendor 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 Vendor-controlled data. Content should
include rules for the storage and dissemination of data shared with other
organizations. The proposed data security program component shall include
Vendor Security Policy Statements, software version control and its
currency, access control techniques, data entry processes, processing
accuracy, distribution of output reports and introduction or release of data,
data and program backup, controls to prevent unauthorized use or removal
of tape files, diskettes, and other media, data encryption standards for
storage and secure management, processing audit trails, application testing,
system access violations, intrusion detection notification and response
procedures, virus prevention, detection and removal; and appropriate
disposal of hardcopy data which may contain sensitive information or
information which may allow compromise of information systems security.
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4.10.4 Problem Incident Management and Notification – Mandatory
Feature(s):
The Vendor shall describe in detail its Incident Management and
Notification Plan. This process shall map to ITIL (Information Technology
Infrastructure Library) Best Practice and Lottery shall be involved in all
service impacting events, problem determination, after action review and
lesson learned processes. At a minimum, the Vendor must notify Lottery
security personnel, both verbally and in writing, of any security incidents or
breaches within one hour of the incident.
4.11 Support Staffing and Services
4.11.1 Implementation/Conversion Support – Mandatory Feature(s):
The Vendor shall provide one Project Manager to coordinate conversion
implementation. This individual shall be the primary point of contact
between the Vendor and the Lottery on conversion matters and shall remain
on-site for the entire conversion and implementation unless otherwise
determined by the Lottery.
The Vendor shall describe the title and responsibilities for all positions it
proposes to fill to ensure that conversion requirements are timely met. The
Proposal shall include an organizational chart showing these positions.
The Vendor shall provide resumes for the personnel who it anticipates will
fill the key contract management positions. The Vendor shall bring in extra
staff, if needed, to meet the timelines identified in the Final Implementation
Plan.
4.11.2 Ongoing Operations Staff – Mandatory Feature(s):
The Vendor shall provide one Account Manager to be the primary point of
contact between the Vendor and the Lottery on contract and operational
matters.
The Vendor shall describe the title and responsibilities for all positions it
plans to fill to ensure that the requirements of this contract are met. The
Proposal shall include an organizational chart showing these positions or
position categories, and the number of staff to be allocated to each position
or position category.
4.11.3 Retailer Service Plan – Mandatory Feature(s):
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The Vendor shall propose a comprehensive service plan for retailer
terminals. The Service Plan and its execution shall include a preventative
maintenance schedule and repair response plan that minimizes downtime
conditions for the terminals. The Vendor shall maintain and make available
to Lottery an electronic record tracking all such visits. The Lottery may
require a modified preventative maintenance period if the level of
performance changes. The Vendor shall propose performance measures and
values they feel are appropriate for this purpose.
The Vendor shall continuously monitor terminal operability and
immediately take proactive steps to promptly return inoperable terminals to
a working state. The Lottery may request or require the Vendor to "swap
out" terminals to resolve issues with retailers. The Vendor shall describe
how it will perform terminal repairs outside the retailer location.
4.11.4 Retailer Terminal Repair Response Times – Mandatory Feature(s):
A retailer terminal is defined to be non-operational if it cannot issue tickets
(this includes retailers that have no ticket stock), validate tickets or perform
instant ticket functions. This does not include terminals that are non-
operational due to hardware or software failure at the primary data center or
secondary data center.
For non-operational terminal calls, the Vendor shall arrive at the retailer's
location and commence repair of the terminal pursuant to the schedule set
forth in the Liquidated Damages section of this RFP.
The Vendor shall describe its proposed retailer service operating hours.
Any determination of terminal inoperability is subject to verification by the
Lottery.
4.11.5 Retailer Spare Equipment – Mandatory Feature(s):
The Vendor shall supply, at no cost to the Lottery, all spare equipment
(including parts and other components) necessary for the efficient operation
of equipment. Spare equipment (including terminals, ticket checkers,
monitors, monitor game boards, and so forth) shall be maintained in such a
way that the number of said items in use in the field is not affected. The
Vendor shall describe how it proposes to meet all terms of this requirement.
4.11.6 Equipment Maintenance (other than terminals) – Mandatory
Feature(s):
The Vendor shall propose its procedures and response times for maintaining
and repairing retailer equipment other than terminals. The Vendor must
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maintain the appearance of supplied equipment looking and performing as
close to new as possible. The Lottery and the Vendor will discuss how to
determine when supplied equipment starts looking and performing poorly
and needs to be replaced. The Lottery will make the final determination on
specific supplied equipment. The Vendor may "swap out" (or may be
required to “swap out”) equipment to resolve issues with retailers.
4.11.7 Hotline – Mandatory Feature(s):
The Vendor shall provide a toll free number that provides support to
Lottery retailers, twenty-four hours a day, seven days a week with specific
emphasis on supporting the peak calling period between 6am and 8pm,
CTZ. The average time a customer should experience a wait or remain on-
hold prior to speaking to a human should be not more than one minute
during peak call periods except during cases of a regional power failure,
extreme weather or other similar circumstances beyond the control of the
Vendor. The personnel shall be fully trained to politely and efficiently
resolve the retailer’s questions, problems, request for supplies, or to route
the matter to the appropriate person(s) for resolution. The hotline
personnel shall accurately enter the specific nature of the retailer’s
complaint or problem in the Vendor’s software. This software shall be
searchable by time and date, nature of the problem/complaint(s), by retailer
licensure number and outlet location address (even if the licensure number
has changed). For quality assurance purposes, each call shall be recorded
and maintained for a minimum of six (6) months. A copy of any and all
recordings shall be provided to the Lottery upon request. The hotline
personnel shall be located in the United States. Hotline personnel
communications shall be understandable and professional as determined by
the Lottery.
4.11.8 Tracking and Reporting Retailer Service Calls – Mandatory
Feature(s):
The Vendor’s system shall capture all information related to retailer service
calls, dispatches and resolutions. Standard and Ad-hoc reports shall be
available to the Lottery for a minimum of six (6) months.
4.11.9 Hotline Call Management System – Mandatory Feature(s):
The Vendor shall describe how the Hotline shall be one toll-free number,
with sufficient lines to ensure that more than 99% of callers get through
without hearing a busy signal. The Vendor shall allow the Lottery to
actively participate in the development and revision of the information
resources developed to help Hotline operators handle calls.
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The Vendor must make a follow-up call to any retailer after an initial
service request remains unfulfilled for more than two hours beyond the
expected response time. The Vendor must make an additional follow-up
call daily, so long as the retailer’s initial service request remains unfulfilled.
The Vendor must describe the procedure that its staff will use on follow-up
phone calls.
The Vendor shall describe how it proposes to support the hotline if the
primary call center becomes, at any time, inoperable. The Vendor shall
describe its proposed Hotline Quality Assurance and Training Program. The
Vendor shall bear the costs for up to two Lottery staff to visit the Vendor’s
call center once a year for user meetings.
4.12 Supply Warehousing and Delivery
4.12.1 Supply Delivery – Mandatory Feature(s):
The Vendor shall be responsible for providing warehousing facilities
throughout the state to facilitate the distribution of consumables to Lottery
retailers. The Vendor shall also be responsible for vehicles necessary for
the distribution of warehoused materials. The required vehicle(s) shall be
readily available and shall be approved by the Lottery.
The Vendor shall further maintain adequate supplies to prevent out-of-stock
conditions from occurring. The Vendor shall provide monthly inventory
reporting by warehouse location and in summary form to the Lottery.
The Vendor shall describe how it proposes to secure, record, track, fulfill,
and report on requested, delivered and consumed supplies. The Vendor
shall describe the delivery method(s) it proposes to use to deliver supplies
to retailers. That method shall reflect that the Vendor has taken the
retailers’ needs into account. The Vendor shall propose response times
within which it will deliver supplies in response to retailer requests.
Emergency delivery of ticket stock due to an outage shall receive the same
priority as a “down” service call.
4.12.2 Warehouse Requirements and Locations – Mandatory Feature(s):
The Vendor shall propose how it will order, ship, store inventory and
retrieve supplies for delivery to retailers.
4.12.3 Supply Requirements and Specifications – Mandatory Feature(s):
The Vendor shall provide, at no cost to the Lottery, all supplies needed for
the smooth and effective operation of the network of equipment. This
includes supplies that are not specified in this RFP. The Vendor shall
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provide, at no cost to the Lottery, ticket stock and play slips. The Lottery
retains the right to approve, in advance, such factors as the paper thickness,
print, colors, format, design, and wording to be used on ticket stock and
play slips (front and back).
Every terminal draw game ticket shall be identified with a unique
preprinted stock number on the back of the ticket stock which shall be
accounted for in a computerized ticket stock tracking system, provided by
and maintained by the Vendor. The ticket stock tracking system shall
utilize a bar-code system to automate the process of transferring stock. The
ticket stock tracking system shall maintain a history of all movement of
ticket stock by carton number, by roll number, by date and time. The
Vendor shall ensure that the information in the ticket stock tracking system
is current at all times. Movement or transfer of ticket stock shall be entered
or scanned into the tracking system at the time movement or transfer
occurs. The Vendor shall provide Lottery security with the necessary
equipment to allow the production of standard queries and printed reports
of data stored in the ticket stock tracking system. Access shall allow
Lottery security to readily display the history of movement from an
individual roll of ticket stock using the preprinted number on the back of
the ticket stock as well as previous movement of the stock. The ticket stock
tracking system shall, by design, not permit any data processing employees
of either the Vendor or the Lottery to ascertain the ticket stock serial
numbers delivered to a particular retailer. The functionality of the ticket
stock tracking system shall be subject to approval of the Director of
Security and Video Lottery. The Lottery may require retailers to register,
via the terminal, ticket stock as it is loaded into the terminal.
If requested by the Lottery, the Vendor shall pick up and destroy existing
ticket stock and play slips.
Ticket stock shall contain anti-counterfeiting properties as approved by the
Lottery. The Vendor shall describe the properties it recommends for the
Lottery's ticket stock. Ticket stock shall contain pre-printed sequential
serial numbers on the back of the stock, to ensure that a minimum of one
number will appear on each report or ticket. When the Lottery contacts the
Vendor with an individual roll number, the Vendor shall be able to track the
number to a single retailer and report the name, location, retailer number
and date of delivery for the retailer to whom the ticket stock was delivered.
The Vendor shall report this information back to the Lottery within 15
minutes. The Vendor shall describe its proposed security over ticket stock.
4.12.4 Ticket Stock for Testing – Mandatory Feature(s):
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The Vendor shall ensure that in addition to production ticket stock, there is
stock suitable for testing. Ticket stock used for testing shall be subject to
the approval of the Director of Security and Video Lottery.
4.12.5 Multiple Sources for Ticket Stock, Printing – Mandatory Feature(s):
In order to avoid dependence on one (1) supplier, the Vendor shall have
more than one (1) source of paper stock and printing service(s).
4.12.6 Ticket Stock Life Expectancy – Mandatory Feature(s):
All Lottery ticket stock shall have a life expectancy of at least 15 months.
Vendors shall describe life expectancy and durability of ticket stock.
4.13 Training:
4.13.1 Retailer Training Program – Mandatory Feature(s):
The Lottery shall have the primary responsibility for training retailers;
however, the Vendor shall also provide retailer training either at a retailer’s
location or classroom-style upon request of the Lottery. The Lottery has the
right of final approval for all training provided by the Vendor.
The Vendor may propose multi-media, interactive methods of training without
a live trainer present. Individuals should be able to stop at any point and pick
up the training again at a later point. Vendors should address their proposed
method of revising and distributing said training.
4.13.2 Retailer Training Locations – Mandatory Feature(s):
The Vendor is responsible for securing facilities to use when conducting
training sessions (retailers or staff) on a large scale basis. The Vendor shall
describe what facilities it anticipates using to train on a large scale basis
during conversion or implementation of new lottery products, equipment, or
operations. The Vendor shall bear all facility charges and any other costs
related to training.
4.13.3 Lottery Staff Training – Mandatory Feature(s):
The Vendor shall provide training for Lottery staff prior to conversion, or
other major revision to the Lottery’s games or operations. Training shall
include all functions. The Vendor shall provide training for new Lottery staff
and follow-up training to Lottery staff upon request.
The Vendor shall also provide other training for Lottery staff, as appropriate.
In particular, the Vendor shall specifically provide training and assume all
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costs of training for the information security personnel at the Lottery for all
security features of the systems and hardware provided as determined by the
Director of Security.
The Vendor shall provide Business Intelligence Reporting and Analytics
training for Lottery employees before the system is in production use (prior to
Start-up Date).
The Vendor shall provide written training guides and manuals for all training
activities.
All training, guides and manuals shall be provided at the approval of the
Lottery.
4.13.4 Terminal Training Security – Mandatory Feature(s):
Terminals shall have a training mode. Tickets produced in training mode shall
be prominently identified as being void and not valid.
4.13.5 Terminal Training Materials – Mandatory Feature(s):
The Vendor shall provide current and up to date retailer training materials and
shall update training materials with each major Lottery change in games or
operations and distribute them to retailers before the effective date of the
change. Vendor shall describe said materials.
The Vendor shall provide current and up to date quick reference guides to the
retailers.
4.13.6 Lottery Specific User Documentation – Mandatory Feature(s):
The Vendor shall provide Lottery specific user documentation of its system
prior to conversion, including all back office functions. The Vendor shall
update its documentation with each software change. The updated
documentation shall be provided to the Lottery in an electronic format
approved by the Lottery prior to Customer Acceptance Testing. Training shall
be delivered prior to conversion. The Vendor must supply web-based
operations manuals for all trainees.
4.14 Software Control and Testing:
4.14.1 Software Control Policies and Procedures – Mandatory Feature(s):
The Vendor shall propose, for Lottery acceptance, its recommended policies
and procedures for software control.
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4.14.2 Release Management Processes – Mandatory Feature(s):
The Vendor must follow ITIL Best Practice for Release Validation and
Control. The Vendor must demonstrate and provide written procedures for
how this requirement is met.
4.14.3 Software Control Tools – Mandatory Feature(s):
The Vendor shall describe its proposed software control tools.
4.14.4 Software Control Methodologies – Mandatory Feature(s):
The Vendor shall describe its proposed software control methodologies.
4.14.5 Software Testing Methodology – Mandatory Feature(s):
The Vendor shall describe its proposed software testing methodology.
4.14.6 User Acceptance Testing – Mandatory Feature(s):
The Lottery shall be solely responsible for determining the “pass” or “fail”
status of each acceptance test and test component. Before installation of any
Vendor-initiated new program or change to an existing program, the Lottery
reserves the right to conduct thorough acceptance testing. All software
installations, including terminal applications and central site applications,
shall be approved in writing by the Lottery Executive Director or designee
before installation.
The Vendor shall have a system dedicated to acceptance testing. The
acceptance testing system shall operate independent of the production
system and shall duplicate the production environment. The Vendor
assumes all overall responsibility for the development and execution of the
test scripts.
Before acceptance testing, the Vendor shall assist the Lottery in identifying
time schedules, evaluation procedures, software/hardware environments,
resources required and acceptance criteria. The Vendor shall perform
extensive self-testing, de-bugging and quality assurance on all software
before submitting it to the Lottery for acceptance testing. All software
submitted to the Lottery for acceptance testing shall be fully operational and
principally ready for production use. The Lottery reserves the right to reject
any software that is not in acceptance testing condition.
The Vendor shall not put acceptance-testing files in its production
environment. The Vendor shall conduct thorough acceptance testing of any
third party providers’ equipment and/or software, including connectivity.
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4.15 Implementation:
4.15.1 Conversion Strategy – Mandatory Feature(s):
The Vendor shall describe its recommended implementation conversion
strategies. For each strategy proposed, the Vendor shall explain the
advantages and disadvantages of the strategy and provide an example of
where it has used the strategy.
The Lottery Gaming System, components, back office, ICS and integration
shall be delivered and fully operational by August 3, 2019. Failure to meet
this date may result in liquidated damages. To the greatest extent possible,
conversion shall be implemented while maintaining existing sales, minimizing
disruption to our retailers’ business, minimizing disruption to our players’
purchases, maximizing time spent with Lottery staff defining details and
maximizing time spent on user review sessions before final implementation.
4.15.2 Implementation Plan – Mandatory Feature(s):
4.15.2.1 Final Implementation Plan and Overview – Mandatory
Feature(s):
The Vendor shall include a summary overview and a final implementation
plan for the entire proposed project. The intent of this requirement is to
provide the Lottery with a concise but functional summary (the “Executive
Summary”) of each phase of the proposed plan, in order of progression. While
the Lottery expects a Vendor to provide full details in response to each
substantive section of this RFP, the Executive Summary shall provide a “map”
for the Lottery to use in reviewing the proposal. Each area summarized shall
be listed in chronological order, beginning with the date of contract execution,
to provide a clear indication of the flow and duration of the project.
The Proposal shall include a comprehensive final implementation plan to
ensure a smooth start-up of the procured system and Lottery games. Lottery
operations shall not be delayed during this process. The proposed
implementation plan shall describe, at a minimum, the portions of the
proposal that apply back to office systems, data migration, data center setups,
including retailer support (Hotline) equipment, computer hardware and
software installations, integration, telecommunication network activities,
delivery and installation of retailer equipment, software development
(including business rules), testing (including test script development) and
simulation, development of reporting, staffing requirements and
commitments, retailer and Lottery training, project reporting and monitoring,
lottery responsibilities (other than software acceptance testing activities) and a
detailed timeline, beginning with the contract execution date. Responsibilities
of the Vendor’s implementation team, of the Lottery’s implementation team,
and of any of the Lottery’s other providers (e.g., instant ticket supplier), shall
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be identified. Retailer roles and responsibilities during conversion shall be
addressed.
The Vendor shall make its best good faith efforts to cooperate with all parties
playing any active role in implementation conversion. The Lottery and the
Vendor will negotiate the final implementation plan after the contract has
been awarded.
4.15.2.2 Proposed Methodologies – Mandatory Feature(s):
The software used by the Vendor to support the Lottery shall be of a high
level of quality. In particular, the Lottery requires that the startup software
accurately meets the Lottery’s business requirements, and that future changes
to the software are accomplished in a timely manner while accurately meeting
those business requirements.
To achieve this goal, the Vendor shall include, in its proposed methodology
for a Systems Development Life Cycle, both a Business Requirements
Definition phase and a Software Requirements Definition phase. These phases
should be conducted prior to software programming.
4.15.2.3 Testing – Mandatory Feature(s):
All systems, hardware, software, equipment, games, field staff, management
staff and all other necessary requirements shall be successfully tested by the
Vendor, the Lottery, and an independent testing laboratory designated by the
Lottery. All systems, hardware, software, equipment, games, field staff,
management staff and all other necessary requirements shall be in place
selling and validating tickets by August 3, 2019. The Vendor’s failure to meet
this starting date may result in the assessment of liquidated damages and/or
drawing upon the Vendor’s bond or insurance. Vendor shall pay the cost of
the independent testing laboratory acceptance testing.
For the purposes of developing timelines, the Vendor must bear in mind that
the Lottery requires 50 working days for software acceptance testing and 50
working days for data conversion testing. The Lottery will work with the
Vendor to develop a final timeline.
Once the Vendor resolves all exceptions noted during Vendor QA testing, the
software and/or hardware shall be made available for Lottery acceptance
testing. The Vendor shall provide the Lottery with a copy of its test script and
all test results (interim and final). 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 Lottery. Additional testing equipment and
connectivity to the test system from a separate location may also be required
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for third party testing as requested by the Lottery and shall be supplied at the
Vendor’s expense.
All testing shall have severity levels defined for issues identified during
testing and a risk process that defines the level of the severity, the risk to the
business or system and the Lottery shall have the right to accept any known
issues or reject the testing outcomes based on the severity and risks as
determined and agreed to. The Vendor will conduct Go-no-go meetings to
discuss issues and risks and Lottery will have the final decision of the
outcomes.
The Vendor shall resolve any exceptions noted during the Lottery’s and
independent laboratory’s testing within the timeframe set forth in the final
implementation plan. The Lottery will make the pass/fail decision for each
test. The Vendor shall provide sufficient staff to fix any problems found
during the Lottery’s acceptance testing. Failure to complete all quality
assurance testing and resolve exceptions noted within the timeline of the final
implementation plan may result in the assessment of liquidated damages.
Acceptance testing shall include, at a minimum, overall functionality, system
recovery tests, high volume tests, system response time, data conversion,
electronic file transmission, confirmation of accurate accounting and reporting
of all transactions over a minimum of two billing cycles and written
documentation of expected results, actual test results, and status of each
exception.
4.15.2.4 Previous Prizes – Mandatory Feature(s):
The Vendor shall describe how it proposes to handle prize redemption of draw
game and Instant tickets produced by the current lottery gaming system. The
Vendor shall provide operational support during the Lottery’s acceptance
testing. The Vendor shall provide simulators for processing transaction
volumes through the system.
4.15.2.5 Implementation Reviews – Mandatory Feature(s):
The Vendor and the Lottery shall have weekly implementation reviews. The
Vendor shall prepare weekly reports for the Lottery on the progress made
toward the goals and deadlines stated in the Final Implementation Plan. These
reports shall be shared electronically with the Lottery in a format approved by
Lottery. If it is necessary for Lottery staff to travel to the Vendor’s location
for testing or user reviews, the Vendor will bear all related travel and per diem
costs.
4.15.3 Business Requirements Definition — Mandatory Feature(s):
During the first 30 days after signing the contract, a team of Vendor business
analysts shall thoroughly familiarize themselves with the Lottery’s business
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processes, including the retailer business processes related to the sale of
Lottery products. The team shall observe the business processes and meet with
end users as needed.
The Lottery will require the Vendor to demonstrate its understanding of the
Lottery’s business requirements and processes before software applications
for the Lottery Gaming System are written or modified. Also, beforehand, the
Lottery staff shall be given the opportunity to thoroughly understand and
agree to the functionality of the planned software applications. This goal
applies to the development of the initial (startup) software applications as well
as to subsequent software releases.
At the conclusion of the 30-day period the Vendor shall deliver to the Lottery
a separate Business Requirements Specification (Business Requirements)
document for each major functional area. The purpose of the Business
Requirements documents is for the Vendor to demonstrate its understanding
of the Lottery’s business requirements. The Lottery will review and approve
these documents within 14 days of receipt. The documents shall address each
business process currently performed by the Lottery, and the retailers’
business processes related to the sale of Lottery products. The documents shall
identify any modifications to current processes. At a minimum, the Vendor
shall produce a separate Business Requirements document for all games,
including draw game processing, Instant games, Back Office System,
Business Intelligence System, system administration, Internal Control System
(ICS), promotions and play slips.
4.15.4 Software Requirements Definition – Mandatory Features
Upon receiving the Lottery-approved BRS documents, the Vendor must
develop corresponding Software Requirements Specification (SRS)
documents. The Vendor must deliver these documents to the Lottery for
approval no later than 45 days after receipt.
The purpose of the SRS documents is to specify the functionality of the
software applications that will be provided by the Vendor at startup in support
of the Lottery’s business processes and the retailer business processes related
to the sale of Lottery products. The startup software must function as
described in the SRS documents. For each specification in the SRS documents
the Vendor must indicate if the functionality exists in the Vendor’s base
system. If it does not exist, or if modifications to the base system functionality
are required, the Vendor must provide an estimate of the time it will take to
develop the new functionality or modify the existing functionality. For each
specification the Vendor must identify how the Lottery may test the
functionality in acceptance testing. Optionally, the Vendor may also identify
how its own staff may test the functionality.
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Lottery approval is required for any subsequent changes to SRS documents.
The Lottery may identify changes during software development and
acceptance testing.
4.15.4 Security and Compliance Audit – Mandatory Feature(s):
Following conversion, the Lottery may in its sole discretion contract with an
independent firm to perform a security and compliance audit of the Vendor’s
operations in conjunction with the contract. The Lottery shall be responsible
for the awarding of the audit contract and the Vendor shall reimburse the
Lottery for all costs of the audit and all background investigations. The
Vendor shall be responsible for remedying any deficiencies in security or
operations as noted in the audit and requested by the Lottery.
4.15.5 Interim Facilities and Processes – Mandatory Feature(s):
If the conversion involves interim configurations, facilities, staffing, or
business procedures, the Proposal shall explicitly describe them and note their
development and use within the schedule. Costs associated with interim
facilities are strictly the Vendor’s responsibility.
4.15.6 Randomizer Testing – Mandatory Feature(s):
Samples from the Vendor’s randomizer software in the retailer terminals or
central system shall be submitted for quality testing. The randomizer samples
are due on or before the start of the Lottery acceptance testing period. The
Vendor shall be responsible for the cost of third party testing and certification
of the randomizers by a Lottery-selected laboratory. The Vendor shall provide
the laboratory’s written analysis report summarizing the findings and offer a
conclusion as to whether the randomizing approach(es) should be used, not be
used, or be tested further before a conclusion could be reached. The Lottery
will request such testing from time to time throughout the contract.
4.15.7 Network Testing – Mandatory Feature(s):
At least 120 days prior to conversion of any new terminals to production, the
Vendor shall submit a comprehensive network configuration plan. The plan
shall show the networking method (cellular, telephone line, satellite, radio
etc.) for connecting each retailer location to the central Gaming System. The
primary wireless carrier must provide and support a private wireless network
for Lottery data transactions. Concurrent with the schedule for general
acceptance testing of the retailer terminals, all forms of communication media
to be used in the network shall be installed at the Lottery’s testing facility. As
the retailer network is rolled out, the Vendor shall demonstrate continuity to
each retailer location from both data center locations. Continuity shall also be
shown for any redundancy or diversity provisions for single or clustered
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retailers, dual communication terminals, as well as main trunk landlines,
cellular, satellite or radio bridges or facilities that are incorporated into the
network. Acceptance testing of the network shall be conducted during times
when there are historically low sales volumes or during times when there are
no sales allowed. Acceptance testing shall demonstrate that the proposed
communications network configuration and its installed components, when
completely installed, including those components providing redundancy,
backup and diversity, shall satisfactorily provide the necessary support for
network bandwidth and transaction latency.
Vendor shall ensure primary and secondary network providers support testing
and smooth network transition.
4.15.8 Historical Data – Mandatory Feature(s):
The Vendor and Lottery will work together to develop a plan to warehouse
and extract data so that the Lottery and the retailers will see a continuity of
information in displays and reports from before, during, and after the start-up
day. A conversion process for historical Lottery data will need to be
developed by the Vendor in conjunction with the Lottery.
4.15.9 Data Base structure – Mandatory Feature(s):
The Vendor shall at a minimum provide the Lottery with a proposed data base
schema, data dictionary and an Entity Relationship Diagram at least 180 days
prior to start-up. The Vendor shall identify all fields available in the Vendor’s
system.
4.15.10 Key Performance Indicators (KPI) – Mandatory Feature(s):
The Vendor shall propose KPIs for performance measurements and tracking
of important system functions along with tools that will be used to measure
the success and outcomes of the KPIs. KPIs will at a minimum be included
but not limited to; games, services, systems availability, retail services
availability, retailer hotline, Instant inventory. KPIs will be negotiated and
become part of the contract and may be renegotiated at any time during the
life of the contract.
5. Technical Specifications: Video Lottery Central System (VLCS)
5.1 System Design
5.1.1 System Design Considerations (Systems Design) – Mandatory Feature(s)
5.1.1.1 Central Configuration: The VLCS is to be a state of the art, fault tolerant,
paired duplex, triplex or multi-redundant configuration, high availability
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solution that includes a primary system, a backup system, and two or more
acceptance testing systems (one for Lottery testing and one for each approved
independent testing laboratory).
The VLCS’s storage management solution is to provide fault tolerance and
scalability. The remaining system(s) 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 no service disruption and no loss
of processing continuity. All VLCS components and peripheral equipment,
including front-end communications processor(s), system printers, and tape
drives are to be similarly fault-tolerant and redundant and maintain high
availability. No performance degradation or loss of system functionality can
occur with the failure of a single system component.
The transfer of operations from the PDC to the BDC is to be executed in an
expedient and accurate manner that ensures continued operations without loss
of data.
The Vendor proposal is to depict the VLCS configuration in detail, including
configuration diagrams in response. Hardware and software items are to be
identified by manufacturer, product name, and model number as applicable.
Version numbers are to be provided for software.
All costs, coordination, and maintenance related to the design, installation,
training, testing, reporting, and support of a turnkey VLCS solution and all
equipment at VLT Establishments necessary for communicating with the
PDC, BDC, VLT floor, and each VLT within each VLT bank are the
responsibility of the Vendor.
The Vendor has the responsibility to provide, install, and support all site
controller hardware and software at the PDC and BDC, and each VLT
Establishment. Support for all VLCS hardware and software, including setup,
configuration, management, and maintenance for the life of the contract is to
be provided by the Vendor. This includes the software manufacturer’s
maintenance and support agreements. The Vendor shall provide a schedule
for all software license renewals after contract award.
All PDC, BDC, remote VLCS computer system components, peripheral
equipment, mainframes/servers, network communications devices, printers,
and tape drives will be provided by the Vendor.
Failure to meet performance requirements may result in the assessment of
Liquidated Damages by the State in accordance with section 3) Terms and
Conditions of this Contract, or in the assessment of damages to other entities.
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Identify software engineering support services for the VLCS, error correction
procedures, and the process for handling VLCS revisions required due to
amendments to the Lottery’s rules and statutory requirements. Provide
engineering support for VLCS changes, including application enhancements,
operating system upgrades, vulnerability patches, updates, and upgrades.
Describe the process for monitoring application enhancements, operating
system upgrades, vulnerability patches and updates and upgrades.
5.1.1.2 Include documentation that describes how the VLCS will ensure the required
availability of hardware and system maintenance. Define how upgrades will
be performed throughout the term of the Contract, including any renewals,
updates and Contract extensions. At a minimum, semi-annual releases of
software maintenance are to be provided. Describe the process, timeline, and
approach for installation of the semi-annual batches including notification of
changes to the Lottery. The Vendor is to support emergency software releases
and describe the process and approach for installation of emergency software
releases, including notification of those changes to the Lottery.
5.1.1.3 Define methodology for determining whether to install or not install an
enhancement, upgrade or update. Define procedures for promoting new
changes to production status and procedures for restoring the system to a prior
status in the event of an error caused by the new changes.
5.1.1.4 The VLCS is to include a back office environment with a single point of entry
for all back office functions with a user friendly interface (web, GUI, or both)
for all reporting, monitoring, and management functions. The back office
system includes access to real-time data. This capability provides
functionality for the Lottery to restrict access to information necessary for
specific job functions. The Vendor is to describe how custom menus can be
created in the response.
The reporting module will be designed so that it is housed on a separate
database/warehouse to ensure it does not interfere with the production
environment. A data warehouse (DW) or an enterprise data warehouse
(EDW), is a central repository of current and historical data collected from
disparate sources. Data received in the production database is passed to the
warehouse where it is used for reporting and data analysis. Describe any
differences in data elements available only on the production database(s)
versus the DW which may store less detail, as the DW is intended for
historical reporting in your response. Current or future changes to data
elements cannot affect historical data.
All reports are to be able to be processed on the production system and the
DW Reports consisting of a single business day's data are to be designed to
take less than two minutes to generate, save, and print. All other reports are to
be designed to take less than fifteen (15) minutes to generate, print, and save.
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5.1.1.5 The VLCS is to provide the ability to search in real time and view all
transaction data. The VLCS provides the Lottery users with the ability to
research transaction historical files. A historical view of device level
information by Unique Identification Number (UID) will be provided and
include, at a minimum, accounting meters received, net meter calculations,
enables, disables, configurations and software changes, and physical location
changes in chronological order, beginning with the most recent event for the
lifetime of the machine so that all transactions can be reviewed via a menu
option at the licensee and device level.
5.1.1.6 The Vendor is required to provide the following to the Lottery for the duration
of the Contract:
5.1.1.6.1 All changes necessary to comply with statutory or judicial changes
affecting video lottery after initial installations are complete. The date such
changes are required shall be the effective date of the law change or court
order.
5.1.1.6.2 Immediate action to bring the VLCS into compliance according to a
timetable that has been approved by the Lottery in the event an issue of non-
compliance is discovered.
5.1.1.6.3 Changes and enhancements to the VLCS as requested by the Lottery.
5.4.1.6.4 A toll-free hotline for telephone response and trouble-shooting
regarding any hardware or software issues related to the VLCS and its
peripherals at any hour of any day. The VLCS design includes supporting
remote dial-in access by the Vendor and provides monitoring of the remote
dial-in activity.
5.1.1.7 The Lottery and Vendor shall create a support level agreement on the response
times, incident reporting, and problem resolution subsequent to contract
award. In case of an emergency that the Lottery operations staff is unable to
resolve, contact will be made via hotline for immediate contact with a Vendor
technical operations support specialist who will coordinate resolution of the
issue. The operations support specialist will have immediate access to on-call
staff from all technical disciplines relating to the video lottery systems product
in order to efficiently address the issue.
5.1.1.8 All VLCS hardware and software is to be licensed to the Lottery and installed,
supported, and maintained by the Vendor. This hardware and software
includes, but is not limited to, operating systems, antivirus, database,
replication, backup, and communications.
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5.1.1.9 The VLCS design is to include a time synchronizing mechanism to ensure
consistent time recording and reporting for events and transactions. Time is to
be synchronized on the primary, secondary, test and back-up systems to
ensure all systems have all transaction data. Synchronization will be with an
external time standard and be configured for Central Standard Time (CST)
and Daylight Savings Time (DST). Changes from CST to DST are to be
automatic without the loss of transaction data.
5.1.1.10 Capacity: The VLCS design is to include the capability to support and
monitor the operation of a network of 14,000 VLTs and associated controllers
during peak transaction activity. The VLCS configuration is to be scalable to
support 20,000 machines without major redesign or replacement if future need
requires increased capacity.
5.1.1.11 The VLCS design is to include the capability to support and monitor the
operation of a network of approximately 1,400 establishments during peak
transaction activity. The VLCS configuration is to be scalable to support
2,000 establishments without major redesign or replacement if future need
requires increased capacity.
5.1.1.12 The VLCS design is to have the capability to support, monitor and invoice
the operation of a network of approximately 150 owner/operators (permit
holders) with 10,000 permits during peak transaction activity. The VLCS
configuration is to be scalable to support 200 owner/operators (permit holders)
without major redesign or replacement if future need requires increased
capacity.
5.1.1.13 Acceptance Testing: Any modification of configuration, process, or device
is required to be submitted for certification to the Lottery’s primary
independent testing laboratory, pass the Lottery’s user acceptance testing on
the Lottery’s acceptance testing system, and be approved by the Lottery.
Errors found during testing are to be corrected by the Vendor and the testing
process repeated until approval is granted by the Lottery.
5.1.1.14 The Vendor is to provide 24/7 access and support to test systems at independent
testing laboratories and also at the Lottery test lab for the duration of the contract
or according to their hours of operation. Costs related to the independent testing
laboratories, other than initial acceptance testing at the primary testing laboratory
are to be excluded from the costs provided in this RFP response.
5.1.1.15 All VLCS hardware, software and configurations, including any changes and
updates, have to be certified by the primary independent testing lab approved
by the Lottery at the Vendor’s expense.
5.1.1.16 Acceptance Test Systems: The acceptance test systems will be at least two
separate identical test systems: The first located at the PDC for testing in the
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Lottery test lab and the second dedicated for testing by an independent testing
lab at a non-Lottery site. As the Lottery approves additional testing
laboratories, each new test laboratory will be responsible for acquiring a
system that can be used for acceptance testing of software for the Lottery at its
own expense.
5.1.1.17 The acceptance test systems are to have identical components, processing
capacity, architecture, and configuration, except protective redundancy is not
required nor will the testing system have the same disk capacity. The test
system may have less processor speed than the production system but it is
required to have the capacity to complete testing in an efficient manner. The
acceptance test systems will mirror any modifications made to operational
configurations, processes, or devices at the PDC and BDC. The Vendor is
required to make these systems available to any Lottery approved test
laboratory and the Vendor will be responsible for ensuring they remain
synchronized with any changes implemented in the Lottery VLCS.
5.1.2 Communication Protocols (Systems Design) – Mandatory Feature(s)
5.1.2.1 VLT Communication Protocols: The VLCS design is to support and utilize
G2S, VLCS-Version D protocol, “SAS 6.02” and all prior versions, as well as
all future SAS or other approved protocol upgrades to facilitate
communication and control all VLTs approved in South Dakota. The VLCS
is to be configured to communicate with, control, and enroll all VLTs
approved for use in South Dakota and be able to communicate with, control,
and enroll all new VLTs approved during the term of the Contract.
Note: The majority of VLTs currently operate using the VLCS-Version D
protocol. While the Lottery is trying to move away from this protocol, some
VLCS-Version D protocol machines will likely still be in use at the beginning
of the new system’s implementation.
There are no G2S machines on the existing VLCS.
5.1.2.2 Describe how the VLCS will communicate with and control the current
network of VLTs through the concurrent use of SAS and VLCS-Version D
protocols, as well as the potential addition of G2S protocol in the future.
5.1.3 Redundancy (Systems Design) – Mandatory Feature(s)
The intent of this RFP is to have systems with no single point of failure; an
entire system shall be designed to be able to failover to an alternate data center
(the BDC) within 20 minutes. Both the PDC and the BDC are to be designed
to have independent communication circuits so that neither site is dependent
on the other for hardware/software and communications. The Vendor’s
response describes its capability to provide alternative failover hardware
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within a given data center whereby alternative servers could be on active or
passive standby.
5.1.4 Backup/Restores (Systems Design) – Mandatory Feature(s)
5.1.4.1 Primary and Backup Data Center: The primary system and the backup system
are intended to be production systems configured with no shared peripherals
and used exclusively to support the VLCS. Vendor will provide the same
security, hardware, and software for the backup system as the primary system
so that the backup system is capable of performing all functions associated
with VLTs required by this RFP with no single point of failure.
5.1.4.2 The PDC shall be located at an approved site within the continental United
States which shall be approved by the Lottery. The Vendor shall be required
to submit the following information to the Lottery: site design and layout
specifications; site location address, owner(s) name, facility exterior
photographs/drawings and a proposed floor plan.
The PDC may be in a consolidated data center if adequate security is
provided, access controls are in place and the computer systems are dedicated
to the Lottery. The Proposal shall include a detailed plan describing how the
Vendor plans to meet this requirement.
The vendor shall cover all expenses for up to four lottery staff to conduct an
onsite review of the PDC on a yearly basis.
5.1.4.3 Local (within PDC) recovery from any system application failure at the PDC
occurs immediately while still maintaining current transactions. As indicated
in other sections if the failover is to an alternate site, this should take less than
20 minutes. This requirement includes the ability to fully service the
communications network supporting the VLTs and management terminals.
The Vendor should document staffing and support requirements to transfer
control from the PDC to the BDC and vice versa.
5.1.4.4 Remote recovery from a failure at the PDC occurs immediately without loss
of any transactions. This includes the ability to fully service the
communications network supporting the VLTs and supplying management
terminal functions.
5.1.4.5 The Vendor shall propose the location for the new backup system based on
the Lottery’s needs.
5.1.4.6 The backup system mirrors the primary system in real-time with a
configuration that can take over for the primary system in the event of a
failure at the PDC. Data transferred to and recorded at the BDC contains the
most recent transactions and transactions within twenty minutes of the point
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of failover. Note that the current VLCS provides this functionality by log
shipping with manual intervention required in the event of a failover to ensure
that all interim logs since the last synchronization point can be applied to
result in a current recovery point.
5.1.4.7 All Video Lottery establishment networks and communications systems are to
be routed so that all operations required by this RFP can occur at the BDC.
The BDC is designed to have a routing mechanism independent of the PDC so
that the BDC can be reached without the PDC in service.
5.1.4.8 Document the procedures for failure situations as part of its RFP response and
the Vendor is to support two controlled failover tests per year. The Lottery
will execute the failover based on a test plan submitted by Vendor. All
remote access to the VLCS shall be logged and accessible by the Lottery for
auditing. Vendor submits its test plan to the Lottery for approval at least
thirty (30) days prior to each failover test.
5.1.4.9 A technical requirement is that the backup system proves fully functional by
operating as the production system for a minimum of 24 hours per day at least
twice a year six months apart. The primary system is to function temporarily
as the backup system in this scenario.
5.1.4.10 All results of any test exercises are to be reviewed by the Lottery and the
Vendor within two (2) business days of completion date. Vendor is required
to correct any deficiencies discovered by audit findings or operational
recovery testing within five (5) business days of receiving written notification
to do so from the Lottery.
5.1.4.11 Data Backup: A technical requirement is for data backup via secure and
reliable methods with all backup data to be encrypted and protected from
unauthorized access. The backup solution includes a requirement to be fully
automated with no daily user intervention. Backup to disk (hard drive array)
and tape on a daily basis is required. A minimum of one month of “full
system backups” of VLCS data has to be stored to disk (hard drive array) and
tape. This backup solution is to be scalable, secure, provide data integrity,
support disaster recovery, and replicate from the PDC to the BDC and vice
versa.
The Data backup solution provides the following:
5.1.4.11.1 Automated monitoring with alert notifications: Alert notifications
sent via visual display and SMTP;
5.1.4.11.2 Fast and reliable restorations: The software includes rapid and
reliable recovery of data lost because of user error or server hardware failure;
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5.1.4.11.3 Verification of backups; and,
5.1.4.11.4 Storage-based data deduplication.
5.1.4.12 Data Security Requirements: The system is designed to provide encryption
techniques. The network is designed to be secure and designed to protect
against disruption of service and corruption of data.
5.1.4.12.1 Comply with all of the Lottery and State Security and Access
Policies for Data Security.
5.1.4.12.2 Secure Connections: Capability to connect into the VLCS from a
non-lottery controlled terminal without Lottery approval cannot be
accomplished. Any remote access is to employ stringent security
mechanisms. Connections to other remote systems and terminals are to be
protected by firewalls, encryption, or other equivalent means. The
acceptability of any such security approach will be subject to Lottery
approval.
5.1.4.12.3 The Vendor will contract with an independent firm to conduct a
network security assessment subsequent to implementation of the VLCS. An
information technology infrastructure that meets or exceeds generally
accepted industry standards is required. Vendor is to specify the certifications
and standards that will be followed for this project such as specific ISO
standards (for example ISO 27002, or NIST 800-53). Alternatives can be
used if the Vendor can demonstrate that it has formally adopted and is
following such standards.
The vendor must also comply with section 3.18.3 of this RFP regarding a
SOC 1 Type 2 Audit.
5.1.4.12.4 All computer systems provided by the Vendor shall meet or exceed
the National Computer Security Center's security standard at the time of
implementation.
5.1.4.12.5 Data that is determined by the Lottery to be sensitive is to be
encrypted using an encryption level no less than 256 bit AES or other
comparable method.
5.1.4.12.6 The VLCS has the capability to produce system checksums and/or
comparable system file audit reports to ensure against inadvertent or
unauthorized changes.
5.1.4.12.7 The Vendor is not permitted to modify the software design or
databases of the VLCS after the VLCS has been certified by the independent
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testing lab without the independent testing lab’s recertification of all
modifications.
5.1.4.12.8 User account data is not permitted to be in plain text format but is
to be encrypted. The VLCS writes to a log file and reports all successful and
unsuccessful sign-on and log-off attempts made on the VLCS. The VLCS
design is to have the following security features:
5.1.4.12.8.1 Capture the user ID, user name, sign-on date, time, and an
indicator that signifies a successful or unsuccessful sign-on;
5.1.4.12.8.2 Log and report all changes to the VLCS by all users
(including administrators);
5.1.4.12.8.3 All security log files are to be directly accessible by the
Lottery on a daily basis;
5.1.4.12.8.4 The VLCS is to have the ability to assign users to groups and
assign privileges at the menu level to each user or group. The operating
system of the VLCS is to have multiple security access levels to control
and restrict different classes of access. The VLCS operating system is to
have a password sign on with two level codes comprised of a personal
identification code and a special password;
5.1.4.12.8.5 VLCS access accounts are to be unique when assigned to the
authorized user; and,
5.1.4.12.8.6 The storage of passwords is to be accomplished in an
encrypted, non-reversible form.
5.1.4.12.8.6.1 Each individual user will be assigned one unique password
which will allow authorized access to the VLCS; users may manually
change their own VLCS passwords; only persons authorized by the
Lottery may access:
Sensitive or confidential data;
software programs and VLCS documentation;
disk, tape, and other media (DVD, CD), libraries and vaults; and
any other area deemed by the Lottery to warrant such authorization.
5.1.4.13 System Security Administration: The Vendor design includes a system in
place to monitor access to the VLCS system and a mechanism in place to
report any security breaches to the Lottery with timeframes and escalation
levels appropriate for the type of incident.
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5.1.4.14 Remote Backup Data Center: Vendor shall propose an option, including
additional costs or savings, that will result from being able to provide, outfit,
and operate a remote back-up data center where transactions related to VLT
gaming are logged and processed.
The back-up data center shall be located in geographically separate regions
within the forty-eight (48) contiguous States, unless an alternate site is
approved by the Lottery in writing. All other functionality defined for the
BDC, as defined in this RFP, shall be required for an alternate location that is
not under the direct control of the Lottery. With prior approval by the Lottery,
the BDC may be located at a shared site with other venues supported by the
Vendor subject to it being a separate secured video monitored area with live
signal feed to the Lottery headquarters.
The vendor shall cover all expenses for up to four lottery staff to conduct an
onsite review of the BDC on a yearly basis.
5.1.5 Security (Systems Design)
5.1.5.1 VLT software image files and VLT authentication: Describe how the
software on each VLT connected to the VLCS will be authenticated when
compared to the VLT software image file.
5.1.5.1.1 The VLCS will be designed to use the VLT software authentication
method defined in the SAS protocol specifications and any other methods
chosen by the Lottery. It cannot be possible to enable any VLT into normal
gaming mode that fails the software authentication until the VLT satisfies the
software authentication.
5.1.5.1.2 The software image files provided by the VLT manufacturers are to
be utilized for authentication of all VLTs connected to the VLCS. The files
used in the authentication of the VLT software may be comprised of multiple
image files which are concatenated into a single image file (i.e., the
concatenated VLT image may contain an image file for each jurisdiction,
main, personality and any other software program that controls
communication and affects game outcome in each VLT).
5.1.5.1.3 The VLCS design includes the ability to initiate a VLT software
authentication on any VLT connected to the VLCS at times determined by the
Lottery. The VLCS is to autonomously perform a software authentication on
a VLT upon detection as follows:
1. VLT offline event or communication loss with Site
Controller; and,
2. enrollment or enabling of a VLT.
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5.1.5.1.4 The VLCS design allows for manual entry of the seed value used to
calculate the signature result of each VLT software image file. Manual entry
of the software authentication seed value is to be available to the Lottery
through the use of a GUI or other user interface. When the seed value is
entered, it shall be able to propagate down to individual VLTs automatically
without taking the machines offline or out of gameplay.
The frequency (i.e. static, per request, daily, monthly, and yearly) at which the
software authentication seed value is changed is to be a configurable
parameter on the VLCS.
5.1.5.1.5 The VLCS design includes the ability to generate a daily report to
users determined by the Lottery that details VLTs that passed and failed the
VLT image file authentication, including the seed and the signature value of
the ROM binary image, and the result returned by the VLT.
5.1.5.1.6 The VLCS design includes a requirement for a means of identifying
and reporting on revoked software images.
5.1.5.2 Site Controller Software Authentication: The Vendor Response is to
document the methodology used to authenticate the Site Controller software.
The VLCS communicates with and authenticates the software of each Site
Controller connected to the VLCS. It cannot be possible to enroll any Site
Controller that fails software authentication into operation until the device
satisfies the authentication process.
5.1.5.2.1 The VLCS is to be configured to perform a software authentication
on any Site Controller at any time upon Lottery request. The VLCS design
provides for functions to autonomously trigger software authentication on a
Site Controller upon detection as follows:
1. Control device offline event;
2. Communication loss with the VLCS; and,
3. Control device enrollment.
5.1.5.2.2 The VLCS is to generate a daily report for Site Controllers that
passed and failed the software authentication including the seed and the
signature value of the software image and the result returned by the device.
5.1.5.3 VLT Image File Storage: The VLCS design includes storing all VLT image
files on the PDC and provides no less than two (2) terabytes of hard disk
space for image files. The hard disk containing the VLT image files is to be
located within the same hardware enclosure of the PDC and scalable to
increase storage capacity as needed at no additional cost. The VLT image
files are to be accessible through a remote network connection to the VLCS
via the Lottery’s administrative LAN.
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5.1.5.3.1 The VLT image files are to be backed up on a daily basis consistent
with the requirements previously provided in “Data Backup Requirements”,
section 5.1.4.11 of this RFP.
5.1.5.3.2 The VLT image files are data files that have appropriate security as
defined in “Data Security Requirements”, section 5.1.4.12 of this RFP.
Access to such data requires prior authentication of an individual user by
password and privilege level.
5.1.6 Archiving (Systems Design) – Mandatory Feature(s)
5.1.6.1 Archiving and Purging of Data: It is a technical requirement to include
archiving as a process that runs every business day on the production system
to move data from the production database(s) to an archival schema on the
Data Warehouse (DW).
5.1.6.2 Purging of data is to be a function performed on the production database
according to retention schedules set by the Lottery. As an example, financial
data related to data meters will be retained for ninety (90) days while event
logs and other log files will be retained for thirty (30) days. Purging shall be a
function processed daily on the DW with a retention schedule of thirty six
(36) months. Detailed retention schedules will be developed subsequent to
Contract award.
5.1.7 Hardware and Software Specifications (Systems Design) – Mandatory
Feature(s)
5.1.7.1 All VLCS hardware and software components include the following features:
5.1.7.1.1 Standardized fault tolerant and redundant with no single point of failure.
All components to be configured/setup by the Vendor;
5.1.7.1.2 Tested by the independent testing lab before installed. Vendor will
configure, support, and maintain VLCS for the life of the contract;
5.1.7.1.3 The Vendor shall offer a hardware refresh at the end of the base 7
year contract with the potential 8 years of extensions in consideration. The
Vendor is to provide any necessary software upgrades, including the VLCS
application and operating system software, and will provide the required
hardware specifications for each refresh period.
5.1.7.1.4 Fully supported by respective manufacturer or supplier at all times
during the contract through maintenance agreements acquired and maintained by
the Vendor subject to Lottery approval. All maintenance agreements require a
twenty-four hour on-site response time from all manufacturers.
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5.1.7.1.4.1 If support for any hardware module, component, or software is
discontinued by the manufacturer or supplier then the Vendor is to replace the
respective hardware modules, component, or software modules at its own
cost prior to the support being discontinued. Vendor is to immediately
inform the Lottery of any support discontinuation.
5.1.7.1.4.2 If any hardware module, component or software is declared ‘end
of life’ by the manufacturer the Vendor is to immediately inform the Lottery
and a mutually agreeable schedule for replacement will be developed. The
vendor is responsible for 100% of the replacement cost during the base
contract and any extension(s).
5.1.7.1.4.3 The Lottery expects the Vendor to be the sole contact and
responsible party for any third party hardware/software solution utilized by
the Vendor during problem determination and remediation.
5.1.7.2 The Vendor shall obtain prior written approval from the Lottery before
making any enhancement or modification to the hardware or software
configuration and procedures.
5.1.8 Management Terminals: Vendor is not required to furnish Establishments with
management terminals but is required to provide any special application
software required for their operation. Vendor is responsible for providing
software and hardware specifications for optimum performance at
Establishments utilizing management terminals.
5.1.8.1 Web Portals: The Vendor design includes providing a web portal to be able to
access the functionality provided by a management terminal at the
Establishments, including the same operational functions, printing
capabilities, and security requirements. The Web Portal shall operate under
industry standard web browsers, including Internet Explorer Version 8 and
higher, Firefox, Safari, and Chrome among others. The Vendor is to identify
any functions known to cause compatibility issues with specific versions.
5.1.8.2 Report Security: Users shall have the capability to access and print reports for
the VLTs unique to each Establishment but not have the capability to view
reports for the VLTs in other Establishments. Operators shall have the
capability to access and print reports for the Establishments unique to each
operator, but cannot have the capability to view reports for the Establishments
of other operators.
5.1.8.3 Encryption: Each Establishment is to have secure, encrypted, remote, read-
only access to the VLCS so that financial information, VLT inventory, and
Establishment network status for the VLTs at each respective Establishment is
obtainable.
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5.1.8.4 Document that Web Portal access conforms to the “Data Security
Requirements” as previously provided in section 5.1.4.12 of this RFP.
5.2. Site Controllers (Site Controllers) – Mandatory Feature(s)
Vendor is to make available and ensure an adequate inventory of Site
Controllers for all Establishments for the life of the Contract. The Lottery
uses the term Site Controllers to refer to any hardware/software systems that
interfaces between VLTs and the VLCS.
At the Establishments these Site Controllers are to include, but not limited to,
a PC with four primary functions:
(1) a touch screen monitor and/or monitor/mouse/keyboard;
(2) the chassis (PC);
(3) a scanner which is to be able to process winning tickets by
scanning a barcode, displaying the results on the monitor and storing the data
for ultimate processing by the VLCS during the daily polling process which
gathers information from all site controllers; and,
(4) a printer.
5.2.1 Site Controllers (Site Controllers): Controllers are to be purchased or leased
from the Vendor and are the responsibility of the Operator; all costs shall be
directly billed to the respective Operator. Each Operator shall be responsible
for entering into a sales or lease agreement with the Vendor for the
installation, cost, and maintenance of Site Controllers. The cost of initial
installation of Site Controllers should be calculated and included as part of the
purchase cost or annual lease fee. Operators that elect to lease Site
Controllers shall be directly billed on a quarterly basis so that the annual lease
fee is paid in four (4) installments. The Vendor is to provide cost projections
for communications, software and hardware in its response to this RFP as
discussed below.
5.2.1.1 Although the Site Controllers are not components of the VLCS purchased by
the Lottery, it is integral to the video lottery program for the Lottery to
consider costs borne by licensees and ensure a certain level of maintenance is
provided to Establishments in order to protect video lottery revenues.
Therefore, Vendor’s response shall include an estimated annual lease cost and
estimated purchase cost per Site Controller for the life of the Contract and
extension(s). Additionally, Vendor is to provide a proposed maintenance plan
with response times to handle service calls made by Establishments as will be
developed during business requirements. The Vendor is to document that
costs related to Site Controllers are not included in the Cost Section of the
RFP including the costs discussed in this section.
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5.2.1.2 Responses shall be evaluated based on initial estimated fees, margin of
increase in estimated fees over the life of the Contract, and proposed response
times for Site Controller maintenance requests. Note that costs related to Site
Controllers and other communication costs are only included in the technical
section of this RFP and are not to be part of the cost to the Lottery and will not
be included in the cost proposal section.
5.3 Overall Network and Communications:
5.3.1 Network & Communications (Network & Communications) – Mandatory
Feature(s)
5.3.1.1 Communications Network and Network Monitoring: Vendor is responsible to
install, operate, and monitor the Communications Network(s) for all VLTs for
the life of the Contract.
5.3.1.2 Communications Network Costs: Operators are responsible for the equipment
and communication costs from their locations to the PDC and BDC.
5.3.1.3 Site Controller Communication Loss: Communication loss between the
VLCS and the Site Controller cannot interrupt gaming or stop communication
between the Site Controller and the VLTs. The Site Controller is designed to
have the capability of operating VLTs for at least one hundred forty-four
(144) hours without connection to the VLCS. During loss of communications
with the VLCS, the Site Controller needs to buffer all VLT meter, event, and
transaction data and be capable of relaying the buffered data back to the
VLCS upon restoration of communications. This aforementioned time span is
to be configurable at the VLCS by the Lottery.
5.3.1.4 Establishment (WAN) Communications Network Administration: Vendor is
responsible to design, implement, manage, support, maintain and monitor the
most efficient solution for the video lottery WAN. Vendor shall install all
communications equipment and troubleshoot and repair communication
outages. The Lottery will identify all new connections and any changes in the
location of video lottery terminals.
5.3.1.5 Vendor provides the following communications network and administrative
services for the life of the Contract:
5.3.1.5.1 Configuration management: maintain an inventory of network
resources and their operating parameters;
5.3.1.5.2 Fault management: detection, isolation, and correction of faults in
the network;
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5.3.1.5.3 Performance management: monitor utilization and manage
resources to maximize capacity and assist the Lottery with performance
management of the VLCS;
5.3.1.5.4 Interface with the communication providers, Establishments,
Operators, and the Lottery to maximize uptime and provide information on
which decisions and actions can be based; and,
5.3.1.5.5 Placement of the necessary equipment as well as the inside wiring
from the point of demarcation if cellular, satellite or other technology
communications are utilized.
5.3.1.6 Establishment Communications Network: Vendor to design a communications
network that connects each Establishment location to the VLCS. Vendor
response documents similar installations to show that this proposed
connectivity solution is actually installed and works successfully in another
jurisdiction and describe how its designed telecommunication network is
economical, reliable, secure, and robust.
5.3.1.9 Advanced Communications Technologies (Specified Option): Vendor is
asked to identify advanced telecommunications options that may further
improve the reliability and/or performance of the network, beyond the
baseline design. This option could be relative to retailer last mile connections,
backbone communications, and/or gaming network to Agency
communications. Each Vendor is encouraged to propose a range of
technologies that may advance the Agency network infrastructure while
continuing to provide reliable, cost effective service to retailers. Any
proposed advanced technology will address key factors such as security,
availability of the service, reliability, maintainability, openness and
standardization, performance and cost.
5.3.2 Monitoring (Network & Communications) – Mandatory Feature(s)
5.3.2.1 WAN AND LAN Network Monitoring: Vendor is to provide a separate
industry standard network monitoring system which can be directly accessible
in real time by the Lottery that monitors connection with all Establishments.
The network management component of this VLCS provides a single pane
display of the status of all WAN and LAN equipment on the network.
Communications testing and monitoring capability are to be available at both
the PDC and BDC. Network monitoring tools are to be able to interface and
analyze all communication protocols used to communicate with all VLTs or
system data to the VLCS, view transaction data for performance and capacity
analysis, and create visual and/or audible alarms to provide notification of
problems. The monitoring software is to be capable of alerts, visual, and
audible notifications. The alerts are to be reported via the application GUI
(Graphical User Interface) and Simple Mail Transport Protocol (SMTP-
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email). The following are examples of alerts: hardware, software, network,
database, resources, virus alerts, intrusion alerts, and any alerts as deemed
necessary by the Lottery.
5.3.2.2 The capability to determine whether failure has occurred in the equipment at
the PDC or BDC, within the wide area communications network or at the
Establishments down to the VLT bank level is to be included in the VLCS
design. Network monitoring equipment is to display connection status of each
VLT Establishment in real-time that indicates when VLT Establishments
experience communication problems and when VLT Establishments lose
connectivity.
5.3.2.3 The Vendor is to provide a real time display of network and equipment status
to the Lottery which will include viewing and reporting capabilities. The
monitoring system alerts the Lottery of any Establishment where service has
been disrupted and assists in determining whether the equipment is at fault or
the communication network, or both, is responsible for the service disruption.
Vendor is to supply an application that displays the down time of any and all
equipment and/or communications circuit in the network over a period of time
definable by the Lottery.
5.3.2.4 The Vendor is to provide network monitoring tools for all of the networked
devices. The networked devices are to employ a standard protocol such as
Simple Network Management Protocol (SNMP) to facilitate monitoring from
end to end of the communication path and to immediately extend this
capability to new network devices.
5.3.2.5 The Vendor’s communications maintenance technicians trained in the use of
testing and monitoring equipment are to be present at the active (terminal-
serving) system site whenever the Agency requests such support for test
purposes.
5.3.2.6 The Vendor is responsible for developing Establishment trouble reporting
procedures and have appropriate mechanisms for working communications
problems to resolution through the common carriers. Vendor’s proposal is to
describe the process, including escalation procedures, as well as a time line to
resolution.
5.3.3 VLT Wiring (Network & Communications) – Mandatory Feature(s)
5.3.3.1 VLT Wiring: The Vendor shall propose an appropriate method of wiring
within each Establishment connecting the VLTs to the Site Controllers.
5.3.3.2 The Vendor may propose other cabling methods of connecting the VLTs to
the VLCS (i.e. serial 232, serial 485, cat 5, cat 6, etc.). Costs related to this
alternate cabling are to be excluded from this RFP response.
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5.3.3.3 Any method used to connect the VLTs to the VLCS shall be reviewed and
approved by the external testing lab and the Lottery before implementation at
an Establishment.
5.3.3.4 The Vendor is to provide a software-driven diagnostic utility that can detect
deficiencies in the communication cabling connecting the VLTs to the Site
Controller at an Establishment. A diagnostic utility is to be accessible at the
Site Controller and be available to the Operator to utilize at their convenience.
The diagnostic utility design includes providing a simple user interface that
will report the condition of the communication line to the Operator. The
diagnostic utility is to be capable of testing all types of communication
cabling used to connect the VLTs to the Site Controller.
5.4 Operations
5.4.1. Progressives [VLCS Controlled] Specified Option(s)
5.4.1.1 Vendor to describe in its response how the VLCS may communicate with and
control a network of VLCS controlled SAS progressive VLTs.
5.4.1.2 The VLCS would be required to function according to the guidelines defined
in GLI-12 progressive standards and all other criteria specified in this RFP.
5.4.2 Downloadable Games (Operations) – Mandatory Feature(s)
5.4.2.1 Server Based Downloadable Gaming: All VLCS equipment, hardware, and
software necessary for server based downloadable gaming monitoring,
authentication and reporting is to be provided by the Vendor when notified by
the Lottery that this option (G2S) is available for Establishments.
5.4.2.2 All VLTs and servers are to communicate with an open protocol system
architecture that is designed to Gaming Standards Association (“GSA”)
recommendations for utilizing Game to System (“G2S”) and System to
System (“S2S”) protocols or other protocols approved for use in South Dakota
5.4.3 Taxable Winnings (Operations) – Mandatory Feature(s)
Vendor shall propose a solution for ensuring that players receive a form W-2G
as required by the IRS upon winning a qualifying amount in a single event.
This is in the event that max payout is increased or progressive jackpots are
introduced.
5.4.4 TITO [Ticket-In Ticket-Out] (Operations) – Mandatory Feature(s)
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The Lottery currently does not allow TITO or other cashless transaction
processes. If the Lottery determines there is a need for TITO at a later date,
the VLCS design will be required to be able to support TITO processes, and to
handle regular ticket out validations (cash tickets).
5.4.5 Data Fields (Operations) – Mandatory Feature(s)
The VLCS is intended to maintain accurate records utilizing extended format
meters from the VLTs. Additionally, all data field sizes and data field view size
are to be consistent across all modules and reports (i.e. if a data field is 20
character spaces, it shall contain 20 character spaces throughout the system and
on all reports).
5.4.6 Data Collection (Operations) – Mandatory Feature(s)
5.4.6.1 The VLCS design utilizes a data collection method that reports events from
the VLT level by time and date of occurrence and ensures all events and
transactions are recorded and accurate.
5.4.6.2 The VLCS provides real-time information retrieval, and the logging and
reporting of events at the VLT level. The system is required to support all
events; however the lottery needs the ability to filter by event types for display
or reporting. The VLCS is to maintain event data for a minimum of 18
months. Detailed retention schedules will be developed subsequent to
Contract award.
5.4.6.3 The VLCS design will process all VLT meter sizes and record lengths with
scalability for future growth or enhancement. The VLCS design will receive
all meter data in real time in an online, automated fashion. Manual reading of
meter values may not be substituted for automated requirements.
5.4.6.4 The VLCS is designed to utilize Site Controllers for the collection of VLT
data with transfer of data to the VLCS at scheduled periods. At a minimum,
the VLCS is to receive metered data from the Site Controllers at the end of
every business day. In addition, the VLCS is to have the capability of on-
demand data collection.
5.4.6.5 The VLCS is to maintain recorded meter readings based on a unique
identification number and those meter readings shall be available for
transaction history viewing and printing. The designation shall be the same as
used for asset tracking as described in Asset Tracking section 5.4.9.
5.4.6.6 The VLCS is to provide a report for each VLT when polled meters and events
are outside of Lottery configurable parameters. The VLCS design provides
user configurable settings and monitoring of thresholds that provide a system
report to the Lottery for each machine in the event any meter, including game
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level meters, falls outside of the established threshold values, and the report is
designed to have options provided for user selected time and date, single VLT,
all VLTs, site controllers, and single event selectable parameters.
5.4.7 Adjustments (Operations) – Mandatory Feature(s)
The VLCS must be capable of accepting and processing machine and game
level adjustments at the VLT level, to include specification of financial
amounts (dollar and cent), the number of games played or won and an
explanation for the adjustment. These adjustments are designed to carry
through all relevant reports and screens. Posting of adjustments is designed to
be allowed from either management terminals or from computer files supplied
by the Lottery. The VLCS design provides for a single screen for meter
adjustments. The adjustment function is to be limited based on user or group
security rights.
5.4.8 Daily Tasks (Operations) – Mandatory Feature(s)
5.4.8.1 The VLCS design provides a single point of entry for all management
functions from management terminals on the Lottery's Local Area Network
(LAN).
5.4.8.2 The VLCS is designed to have a single menu application that provides
automatic updates to all records and control units at the time the operator exits
the screen without further intervention by the operator. No degradation shall
occur at the time of these routine daily tasks. Transactions are to be
committed to the database without any user intervention. If the Vendor does
not provide such functionality, detailed narrative is to be included to illustrate
how the system will function and how this commitment of data aids in the
integrity of the system. Each major functional process is managed on a single
screen, such as software assignment and device location and review of data.
5.4.8.3 The vendor is to describe in detail the complete steps involved and time to do
the following tasks based on a representative 10 machine scenario, which is a
typical Establishment based project. (Lottery’s required time specifications
are in parentheses):
Machine moves (3 minutes or less)
Machine software changes (10 minutes or less)
Enable and disable a machine (2 minutes or less)
Enable and disable section of an Establishment (2 minutes or less)
Enable and disable Establishment (two minutes or less)
Enable and disable of all machines on system (two minutes or less)
Global disable game (25 minutes or less)
Global disable software (25 minutes or less)
Global disable binary files (25 minutes or less)
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Setup software for games (10 minutes or less)
Setup of software for Site Controllers (10 minutes or less)
Downloading of software to Site Controllers (10 minutes or less)
Setup of Establishment start to finish (10 minutes or less)
Make accounting adjustments (one minute or less)
Make adjustments for billing (debit and credits) on invoices (one
minute or less)
Adding a device (VLT, Site Controller) (two minutes or less)
5.4.8.4 Disable/Enable: The VLCS design provides a process for executing both
scheduled and manual shutdowns where VLTs cease to function and
executing both scheduled and manual startups to start gaming functions. The
VLCS has the functionality to disable and enable VLTs at a Establishment
level or system wide with a single command. When a machine with a RAM
failure has been disabled by an operator, the machine is prohibited from
coming into play after a RAM clear. A Site Controller’s last command
(enable/disable) controls a machine when it resumes communication.
5.4.8.5 At the direction of the Lottery, the VLCS design includes the feature to be
able to immediately start or cease gaming functions by disabling or enabling
VLTs by any individual VLT, or all VLTs, any group of VLTs, at a minimum,
by: manufacturer, or by Establishment, or by operator, or by software version,
or software image and/or software image game slot, or by license expiration
date. The VLCS prevents previously disabled software from becoming
enabled; lottery computer operator intervention is required to enable the
software.
5.4.8.6 The Vendor is intended to provide documentation procedures and processes
for activating, de-activating and re-activating by any individual VLT, or all
VLTs, any group of VLTs, by manufacturer, by Establishment, by operator,
by software version, or software image and/or software image game slot, or by
license expiration.
5.4.8.7 An enabled VLT cannot be disabled by the central system when non-critical
VLT configuration options are changed by the Establishment, such as game
volume, date and time, game play options and any other parameters as
specified by the Lottery. The central system is designed to always disable a
VLT if critical VLT configuration options are changed such as: pay table
percentage, game denomination, SAS poll address, and any other parameters
as specified by the Lottery.
5.4.9 Asset Tracking (Operations) – Mandatory Feature(s)
5.4.9.1 The Vendor provides and configures asset management software for all VLTs,
Site Controllers/management terminals, and other equipment.
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5.4.9.2 The VLCS, as designed by the Vendor, maintains the following fields as an
example for the life of the machine: device type, unique identification
number, serial number, permit number, manufacturer name, model number,
installation date, physical location and ownership of each VLT, Site
Controller/management terminal, or other equipment.
5.4.9.3 The Lottery is to be able to access the history of the following for the life of
the machine: the hardware status (meaning active/inactive/decommissioned),
location, maintenance history, software change history, enable history, disable
history, meter readings history, inventory status, permit number, installation
date, physical location and ownership of each VLT, Site
Controller/management terminal, or other equipment.
5.4.9.4 The Vendor provides and configures the asset management software so that
the Lottery can track VLTs that are operational on a VLT Establishment floor
and VLTs that are not currently active but remain in the State. VLTs in
warehouses are to be tracked by owner/permit holder or manufacturer-owned
VLTs stored within the state.
5.4.9.5 The Vendor response is intended to describe how the VLCS will track the
following VLT activities:
VLT moves;
VLTs out of service;
decommissioned VLTs;
VLTs located at more than one location in a single business day;
warehoused VLTs;
VLTs active for testing/not active for accounting or invoicing
purposes; and,
VLT software changes.
5.4.9.6 Asset management software used for required asset tracking interfaces with
external Lottery databases.
5.4.9.7 VLTs are to be searchable and retrievable by UID, serial number, permit
number, and establishment license number.
5.4.9.8 For each major data collection or logical data segment maintained (i.e.,
retailer versus machine detail), the Vendor is to document having the
capability to include User Defined Fields (UDF) which can be configured by
the Lottery and populated with batch interfaces to store data that is significant
to Lottery operations and which currently does not exist in the VLCS design.
The Vendor response describes how this data will be configured and any
limits on functionality, such as maximum field lengths, data types and number
of UDF’s per logical data segment.
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5.4.9.9 Advanced Asset Tracking Functionality (Specified Option): Vendor is asked
to propose an option that may further improve the reliability and/or
performance of our external Asset Tracking database beyond the baseline
design in this section of the RFP. This option would include additional
functionality to provide system generated “work orders” to field staff for
installation of new VLTs, removal of VLTs, moves of VLTs, destruction of
VLTs, software changes on VLTs, VLT host disables, non-reporting
terminals, and other common field functions. These work orders could be
generated both by the permit holder and internally.
5.4.9.10 Each Vendor is encouraged to propose a range of functionality that may
advance the Agency network infrastructure while continuing to provide
reliable, cost effective service to the Lottery. The Vendor’s Proposal of any
proposed asset tracking functionality addresses key factors such as security,
availability of the service, reliability, maintainability, openness and
standardization, performance, and cost.
5.4.10 Licensing (Operations) – Mandatory Feature(s)
5.4.10.1 The successful Vendor provides software to allow for data entry of licensing
information into the VLCS. For regulatory control, before enrolling a
machine, all required licensing information is to be available on the system.
Licensing data varies depending on whether it relates to the owner of the
machines or the retail Establishment where the machines are placed, but in all
cases, the VLCS database design includes the capability of managing
information for both the owner and the retailer.
5.4.10.2 The following are examples of the type of licensing data elements that are
designed to reside in the VLCS and there may be others as specified by the
Lottery. Attributes may be reported on, and linked to financial data and
statistical data as appropriate.
5.4.10.2.1 VLT serial and permit number, establishment license number, and
operator license number are the key fields that drive many requirements in the
current VLCS and it is envisioned that this RFP will produce the same
capabilities.
5.4.10.2.2 Additional demographic requirements are: Business organization
legal structure type, business organization name, DBA name, operator name,
physical location address, physical location county, mailing address, email
address, phone number, alternate phone number, fax number, contact name
with mailing address, email address, and phone number. In the event the
VLCS only allows venue lookups by name, it would be advantageous to
provide for a VLCS name field which would be different than location name.
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5.4.10.2.3 Additional fields required, but not limited to: Establishment license
number, control number, operator number, IP address, operator name,
establishment name, alcohol license number, date licensed, license expiration
date, active or inactive status, date of last compliance check, date last meters
received, date Establishment disabled, machine removal date, and a comment
field.
5.4.10.2.4 Additional user defined fields (UDF) are recommended for all
license types as described in section 5.4.10 in this RFP.
5.4.10.3 Advanced Establishment Licensing Functionality (Specified Option):
Vendor is asked to propose an option that may further improve the reliability
and/or performance of our external licensing database beyond the baseline
design in this section of the RFP. This option would include additional
tracking fields for pre-licensing and re-licensing requirements, license renewal
tracking and printing, permit processing, and permit renewal fees as well as
reporting capabilities on these fields.
5.4.10.4 Each Vendor is encouraged to propose a range of functionality that may
advance the Agency network infrastructure while continuing to provide
reliable, cost effective service to the Lottery. The Vendor’s Proposal of any
proposed licensing functionality includes addressing key factors such as
security, availability of the service, reliability, maintainability, openness and
standardization, performance, and cost.
5.4.10.5 Advanced Establishment Compliance Functionality (Specified Option):
Vendor is asked to propose an option that may further improve the reliability
and/or performance of our external Establishment compliance database.
Requirements include a system generated site survey checklist with
approximately 10 items and a system generated Establishment compliance
report checklist with approximately 20 items that would be required for each
retailer group. This option would include additional reporting functions for
site surveys, compliance checks due, compliance checks overdue, and out of
compliance Establishments. Additionally, as part of this database an incident
reporting function with approximately 20 incident types and multi-line
comment section would be required.
5.4.11 Finance & Administration (Operations) – Mandatory Feature(s)
5.4.11.1 The VLCS design includes a bi-monthly reporting feature that will be
utilized for invoicing VLT gaming activity. Invoices have options for sorting
by operators.
5.4.11.2 Invoicing functionality is to be variable and customizable for a specific
retailer group. The VLCS has to accommodate for tax rate changes and be
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configurable in the event that a rate is changed during a specific tax period. In
addition, there shall be user defined gaming date ranges for billing.
5.4.11.3 Billing should be capable of variable based rates and will be custom for each
retailer group. Rate changes are to be Lottery configurable and updates to the
rate are to be identifiable to a Lottery-defined period. A manual adjustment
process at the operator level is also be included.
5.4.11.4 The VLCS design is to be configurable to facilitate the Electronic Funds
Transfer (EFT) sweeps.
5.4.11.5 The VLCS design allows for the downloading of billing statements in file
layouts specified by the Lottery to be loaded into a database and displayed on
an operator portal (currently maintained and operated by the Lottery and BIT)
whereby invoices can be retrieved and printed locally as desired. The VLCS
has options to define invoice recipients by operator license number so that
each operator and their accounting staff could be included. The VLCS has the
ability to restrict access to only authorized individuals. An operator could
view all establishments under their control. Some operators will delegate this
function to their independent accountant.
5.4.12 System Accounting Audit & Analysis (Operations) – Mandatory
Feature(s)
The VLCS design is to monitor the operation of each VLT and create reports
using data received from VLCS-Version D and SAS 6.02 communication
protocols or any later approved standard related to commands and meter code
values.
5.5 Interfaces
5.5.1 Interfaces (Databases) – Mandatory Feature(s)
5.5.1.1 The Lottery maintains off-system databases containing various types of
information related to financial, licensing and security aspects of the video
lottery program. Therefore, the VLCS is to provide a relational database
management system that is OLE DB or ODBC compliant. The VLCS is to
transfer and receive flat files of all required data elements for importation into
the Lottery sub-system per Lottery specifications.
5.5.1.2 All data is confidential and is the sole property of the Lottery.
5.5.1.3 The Vendor response is to provide a detailed, functional database schema for
the data warehouse (DW) that can be utilized by the Lottery database
administrator.
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5.5.1.4 The Vendor is to provide a security model that will provide a wide range of
Lottery employees varying levels of access to this data.
5.5.1.5 The VLCS, as designed by the Vendor, is to be capable of interfacing with the
Microsoft SQL Server version per BIT specifications in their implementation
of the VLCS and DW Relational Database Management System.
5.5.1.6 The Vendor design includes creating and maintaining a real time data
warehouse (DW) at the PDC and near real time DW at the BDC for Lottery
reporting purposes. The warehouse will be a SQL Server compatible database
and maintained at the current version as the production environment.
5.5.1.7 The Vendor design includes designing and maintaining a metadata model and
database diagram of the DW database system in order for the Lottery to
understand the relationships between tables. This model is to be in an
organized format so that the Lottery’s DBA and related “super users” can
easily identify data elements and their relationship.
5.5.1.8 The Vendor shall maintain a model (such as a relational database) specifically
for the Lottery containing data elements and relationships to be agreed upon
by the Lottery and the Vendor. Data items are to be made current in real time
or as close to real time as possible. Database information includes all
information collected by the system. Lottery system users need to be able to,
using the relational database architecture, develop, modify, save and schedule
individual reports. All information retrieved from the relational database
architecture in user-developed reports is intended to be able to be indexed and
sorted. This relational database is also referred to as the DW or EDW in other
sections.
5.5.1.9 The VLCS design is to send machine update data (location/attribute changes,
enables, disables) back to the Lottery maintained databases as they occur.
5.5.1.10 The Vendor response documents how they can control the flow of data
between the VLCS and external databases. The Vendor is encouraged to
document how they can maintain data integrity with certain data elements
flowing forward from the external databases to the VLCS. This would
include items like object identity and demographics. At the same time, certain
data elements from the VLCS would flow back to the external database such
as machine status changes. In both cases, the interfaces would consist of flat
file formats to be developed during system configuration with appropriate
controls.
5.6 Reporting
5.6.1 Reporting Requirements (Reporting) – Mandatory Feature(s)
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5.6.1.1 The VLCS provides reports on a “business day” format, defined as 6:00:00
a.m. through 5:59:59 a.m. CTZ the following calendar date or as agreed upon.
The business date is defined as the calendar day that begins at 6:00:00 am.
5.6.1.2 Describe how the VLCS provides the ability for all data to be capable of
extracting/exporting to such tools as Excel, Access, text format, etc. Describe
how all reports can be exportable with and without headings in CSV format,
Excel data only format, printable in PDF format or as an XML file, and have
date, time and user imbedded in the report.
5.6.1.3 The VLCS is to be capable of generating all daily, weekly, monthly, and
yearly reports and invoices as well as Ad Hoc reports as requested by the
Lottery utilizing user defined date ranges. Appendix L contains a reference of
minimally required reports.
5.6.1.4 Describe how the VLCS has the capability of processing reports so users are
able to perform daily tasks while reports are processing in the background
without locking the user’s workstation. All reports are to be viewable with the
report progress and status available.
5.6.1.5 The VLCS requires the capability of immediately cancelling a requested
report or queued report without system degradation.
5.6.1.6 The Lottery requires maximum flexibility in utilizing the information that is
contained on the System. The VLCS design has the ability to execute reports
based on various attributes, and is to support the selection of multiple
attributes concurrently. Users are to have the ability to add or remove
attributes as needed. At the minimum, attributes include: date, Establishment,
VLT, operator/owner, software version, VLT manufacturer, region, county,
retailer group, chain, and site controller.
5.6.1.7 The VLCS provides at least two types of reporting sub systems: The first sub
system is defined as “regularly scheduled reports/Ad Hoc reporting”. The Ad
Hoc reports will include the ability for filtering input data, defining sort fields
and grouping fields as well as the ability to restrict the display of non-key
field columns. The Vendor is to create new standard scheduled reports and Ad
Hoc reports, within agreed upon schedules. VLCS report modifications and
new reports will be required during the life of the contract and are to be
considered as routine requests to be completed according to mutually
agreeable schedules. The reports and/or modifications are to be completed
and submitted to the Lottery within 20 business days after functional
specifications are approved. Ad Hoc report writing shall be available to the
Lottery at a user group level assignment.
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5.6.1.8 The second sub system will be an integrated report writing tool, which may be
supplied by a third party, and integrated with the VLCS. This report writing
tool will have the ability to include different levels of detail segments, design
report formats, and include sorting and grouping capabilities. Output formats
will include paper, PDF, Excel, XML and/or CSV.
5.6.1.9 Pre-designed reports requested by the Lottery from the VLCS are to be
accurate and readily available to be generated by the Lottery on demand.
5.6.1.10 The Vendor will describe how the proposed VLCS will meet the
requirements of section 5.6.
5.7 Conversion
5.7.1 Conversion Requirements (Conversion) – Mandatory Feature(s)
5.7.1.1 Conversion Plan: Describe and include a proposed Conversion Plan. The
Vendor is to submit within sixty (60) days after the Notice to Proceed, a
detailed and finalized version of this Conversion Plan which, when approved
by the Lottery, is to become the basis for Conversion.
5.7.1.2 This Conversion Plan includes, but is not limited to, the following:
5.7.1.2.1 Executive Summary: This Executive Summary provides the Lottery
with a concise but functional summary of each phase of the Conversion Plan
and includes a table of milestones for the Lottery to use in reviewing the Plan.
Each phase is to be listed in chronological order in order to achieve a
November 16, 2019 cutover.
5.7.1.2.2 High Level Conversion Plan: This includes a brief description, start
and end dates, roles and responsibilities, dependencies, input and outputs and
deliverables, and ensures a smooth start-up of the VLCS. This Plan includes a
timeline beginning with the Contract award date.
5.7.1.2.3 Conversion: The VLCS and components are to be delivered and
operational by a date specified by the Lottery in which live operations will
commence at that time. All VLCS hardware, software, equipment, and all
other required components are to be successfully tested by both the Vendor
and the Lottery and are to be in place and operational by the specified date.
5.7.1.2.4 Project Reporting and Monitoring Requirements: Describe how you
will have weekly conversion reviews in person involving the Lottery and the
Vendor. The Vendor is to prepare weekly reports detailing the progress made
on accomplishing the goals by the deadlines stated in the conversion plan and
shall electronically submit these to the Lottery in an agreed format.
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5.7.1.2.5 Definition of Business Requirements: During the first sixty (60)
calendar days after the Notice to Proceed date, the Vendor’s business analysts
are to thoroughly familiarize themselves with the Lottery’s business processes
operations and the Establishments' business operations related to VLTs. The
Vendor’s analysts are to observe the business processes and meet with end
users as part of this process.
5.7.1.3 At the conclusion of this sixty (60) calendar day period, the Vendor is to
deliver to the Lottery a separate business requirements specification document
for each major functional area ("Business Requirements"). The purpose of the
business requirements documents is for the Vendor to demonstrate its
understanding of the Lottery’s operational needs. The Lottery will review and
approve these documents within thirty (30) days of receipt. The documents
address each business process currently performed by the Lottery as it relates
to the VLCS. The documents identify any modifications to current processes.
At a minimum, the Vendor is to produce a separate business requirements
document for each of the following functional areas that apply to the system:
i. System administration
ii. Daily operations
iii. Maintenance
iv. Accounting and billing
v. Licensing
vi. Security/compliance/asset tracking
5.7.1.4 Software Requirements Specification ("SRS"): Upon receiving the Lottery
approved business requirements, the Vendor develops corresponding Software
Requirements Specification ("SRS") documents. The Vendor is to deliver
these documents to the Lottery for approval no later than 45 business days
after receipt of the Lottery approved business requirements.
5.7.1.5 The SRS documents specify the functionality of the software applications that
will be provided by the Vendor at start-up in support of the Lottery’s business
processes related to VLTs. The startup software functions as described in the
SRS documents which include the following:
5.7.1.5.1 Each SRS specification references the corresponding business
requirement or process in the corresponding business specification document.
5.7.1.5.2 For each SRS specification, the Vendor indicates if the functionality
exists in the Vendor’s base system. If it does not exist, or if modifications to
the base system functionality are required, the Vendor provides an estimate of
the time it will take to develop the new functionality or modify the existing
functionality. The estimate, development and or modification is to be at no
additional cost to the Lottery.
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5.7.1.5.3 Lottery approval is required for any subsequent changes to SRS
documents. The Lottery may identify changes required during software
development and acceptance testing.
5.7.1.5.4 If modifications or enhancements are required, the following
objectives apply:
5.7.1.5.4.1 Software Development: The startup software is to meet the
Lottery’s business requirements, and future changes to the software are to
be accomplished in a timely manner while accurately meeting those
business requirements at no additional cost to the Lottery.
5.7.1.5.4.2 The Vendor demonstrates its understanding of the Lottery’s
business requirements and processes before software applications for the
VLCS are written or modified. The Lottery is to be given the 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.
5.7.1.6 Conversion Strategy/Conversion Plan: Vendor is to provide a conversion plan
for implementing the VLCS at each Establishment. The Lottery will be
operating two VLCS systems until the Conversion is completed. The plan
includes processes and procedures for conversion to the new VLCS, including
risks, resources, any downtime, VLCS functionality, and estimated timeframe.
Alternate conversion strategies may be proposed and the proposal should
weigh the advantages and disadvantages of each. The proposal is to contain a
detailed conversion plan and time chart detailing the transition from the
current VLCS to the Vendor’s VLCS. The Establishment plan is to identify
the major milestones to be accomplished for the business requirements
definition, equipment delivery, software programming, installation, testing,
and file conversions. The plan makes clear where items are on the critical
path for timely Conversion.
5.7.1.7 Responsibilities of the Vendor’s conversion team and the Lottery’s conversion
team are to be identified. Establishment roles and responsibilities during
conversion are also to be defined. The Vendor shall not proceed with the
conversion plan until it is approved by the Lottery.
5.8 Training
5.8.1 Training Requirements (Training) – Mandatory Feature(s)
5.8.1.1 The VLCS Vendor is to provide training on system operations and user
interfaces for all applications. The Vendor provides the materials, equipment,
training personnel, and temporary Establishments for licensee training efforts.
The Lottery will provide space for on-site training of Lottery employees.
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5.8.1.2 The Vendor response describes in detail the proposed training program for the
Lottery, and any training necessary for video lottery operators, technicians,
and establishment staff. (This is in addition to training supplied by the Vendor
to its own staff, sub Vendors, consultants, and associated businesses.) The
program description describes proposed materials, Establishments, staff
qualifications, sessions (including length and class size), and schedule.
5.8.1.3 Materials include, at a minimum, (a) training and operational manuals on the
correct use and management of the system and (b) updates to these materials
with any system changes. Online training videos for Lottery and field staff
may be utilized.
5.8.1.4 The Vendor response includes plans for providing periodic training updates on
an ongoing basis throughout the life of the contract and as necessary with
upgrades or system modifications in addition to the provision of any training
necessitated by upgrades or other system changes.
5.9 Acceptance Testing
5.9.1 Acceptance Requirements (Acceptance Testing) – Mandatory Feature(s)
5.9.1.1 Initial Acceptance of VLCS: At the Vendor’s sole cost, the VLCS is to be
tested and certified, at a minimum, by an independent test laboratory which the
Lottery has selected to provide testing services associated with video lottery. The
Vendor response provides an additional system, which is of the same
architecture, but not necessarily the same size, at the independent testing
laboratory for testing purposes. This system is intended to be used for
acceptance testing of the new VLCS, as well as system upgrades, and to
conduct interoperability testing on VLTs designed to communicate with the
VLCS.
5.9.1.2 The Lottery will conduct acceptance testing during the initial installation of
the VLCS.
5.9.1.3 The Lottery, or its designee, will conduct a series of acceptance tests, which
the Vendor is to support. To support acceptance testing, the Vendor is
intended to have the PDC computer hardware, communications hardware,
software, as well as video lottery controllers, and test VLTs installed and
operational at least sixty (60) days prior to the scheduled conversion date for
the first VLT Establishment to become operational. At that time, the BDC is
also to be ready for testing. Acceptance testing completion and approval is to
be achieved prior to initiation of the field machine installations.
5.9.1.4 Acceptance testing will include processing through daily, weekly, and
monthly tasks, failover to the BDC and file backup and restoration testing.
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5.9.1.5 The Lottery takes a comprehensive approach to acceptance testing after
conditional approval from the external testing lab for conversion of the VLCS
and for subsequent software releases. Lottery shall have the right to perform
any acceptance test that it deems necessary.
5.9.1.6 Acceptance testing at the Lottery test laboratory shall last through a complete
monthly billing cycle after conditional approval. The results of these tests
will determine whether the Lottery accepts the VLCS. The Lottery has the
sole right for determining the pass or fail decision for each of the acceptance
tests and test components and will notify the independent testing lab to issue
final certification.
5.9.1.7 The Lottery requires that acceptance testing be a cooperative effort between
the Vendor and the Lottery. The Vendor response describes how the on-site
test system is available to the Lottery and that operational resources are
available to assist the Lottery in conducting and evaluating the acceptance
testing. Vendor shall provide a test script for use by the Lottery and
independent test lab to conduct user acceptance testing
5.9.1.8 During acceptance testing the Vendor is to provide on-site personnel capable
of modifying the support systems and the VLCS. The on-site personnel are to
be assigned to the Lottery on a full-time basis during acceptance testing and
be experienced with the specific hardware and software that is being tested.
5.9.1.9 Performance Criteria: The Vendor response ensures that all VLCS support,
including any network, software, hardware, meets documented specifications
and standards and is required to pass performance testing criteria and be
approved by the Lottery in order to be in compliance with the Contract.
5.9.1.10 Major central system tasks to be completed during the Lottery’s acceptance
testing of new VLCS include, but are not limited to:
Install machines at a Establishment;
Machine moves;
Machine software changes;
Enable and disable a VLT;
Enable and disable of Establishment;
Enable and disable of all VLT’s in an Establishment;
Enable and disable of all machines on system;
Global disable of a game;
Global disable of software;
Global disable of binary files;
Setup of software for games;
Setup of software for site controllers;
Downloading of software to site controllers;
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Setup of Establishment start to finish;
Make accounting adjustments;
Make adjustments for billing (debit and credits) on invoices;
Merging of files to create a binary image for software;
Test format of EFT flat file;
Verify TITO accuracy;
Verify VLCS and VLT general functionality and response time;
Verify all VLCS reporting and accounting is accurate and complete;
Real-time polling of full set of VLT meters;
Validating of full set of VLT meters;
Perform validations and balancing accounting reports;
Perform validations and balancing performance reports;
Perform transaction look-ups;
Test of distribution and response of monthly invoice;
Validate and balance the results of a coin test during installation;
Balance cash activity to machine financial data;
Verify exporting of reports – all formats;
Printing and validation of all security reports;
Verify asset tracking software;
Verify system venue circuit failover;
Verify VLCS failover;
Verify Establishment failure/site controller failure and data recovery
when back online;
Check for proper VLCS response to thresholds by forcing the VLCS to
reach its failure levels (transactions, meters, etc.);
Force VLT failures to verify proper system notification (including
create print jams, disconnect power and communication cables, door opens,
etc.);
Force primary and backup system failures to verify proper VLCS
recovery (disconnect power and communication cables, improper VLCS
operation, etc.); and,
Force VLT, network, and system failures by volume testing system
performance in transaction rate and capacity.
5.10 Mandatory Requirements
Instructions: The following mandatory requirements MUST be met by the
Vendor as a part of the submitted proposal. Failure on the part of the Vendor
to meet any of the mandatory specifications shall result in the disqualification
of the proposal. The terms “MUST”, “will”, “shall”, “minimum”,
“maximum”, or “is/are required” identify a mandatory item or factor.
Decisions regarding compliance with any mandatory requirements shall be at
the sole discretion of the Lottery.
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5.10.1 The Vendor MUST have experience in the North American state regulated
market with the installation of multiple video gaming networks in the past five
years. The Vendor MUST have experience with the conversion of an existing
system in the past five years.
5.10.2 The Project Manager MUST have been involved in prior video gaming
network conversions. In addition, the Project Manager MUST be assigned to
the project through the final conversion process with significant on-site
presence during major phases of the project.
5.10.3 The Vendor MUST propose alternatives to dial-up communications at
Establishments. The Lottery believes that multiple technologies, including but
not limited to VSAT and cellular, will be required due to the locations of
current VLTs.
5.10.4 The Vendor MUST support advanced communication protocols, at no
additional cost to the Lottery, including G2S when the Lottery believes it is
appropriate to start migration away from VLCS-Version D and/or SAS.
5.10.5 Vendor SHALL schedule meetings relating to the Project Plan at dates and
times approved by the Lottery upon Contract Award.
5.10.6 Hardware and Software: The components of all hardware and software MUST
be new and unused. Hardware and software MUST be compliant with current
electronic technology standards (such as IEEE and ANSI) and be of then-
current manufacturer model equivalent or better equipment in the event a
proposed device is phased out or replaced.
5.10.7 All VLCS hardware and software MUST be licensed to the Lottery and
installed, supported, and maintained by the Vendor. This hardware and
software includes, but is not limited to, operating systems, antivirus, database,
replication, backup, and communications.
5.10.8 If a Vendor proposes the use of technologically-equivalent equipment in lieu
of either controllers or modems, or both controllers and modems, the Vendor
MUST provide live site demonstration of this equipment solution as it is
actually installed in another jurisdiction or business application.
5.10.9 Vendor is required to submit any hardware or software used by the VLCS to
link one or more progressive VLTs to the primary Lottery independent testing
lab for certification and all hardware and software MUST also pass user
acceptance testing by the Lottery, and be approved by the Lottery.
5.10.10 Conversion Testing (Data Transfer/Conversion): The Vendor MUST import
certain active data from the current VLCS for use in the new system. This
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data may be exported from the current system in the form of a report, by file
transfer, or other appropriate format. All data MUST be audited, reviewed,
and approved by the Lottery prior to being imported and after the import is
complete.
5.10.11 The Lottery requires a rolling conversion, or phase-in, of the new VLCS.
Under this approach, the VLTs MUST be converted to operate under the new
VLCS on a group-at-a-time basis with minimal downtime and no loss of
revenue. The Lottery will be operating two VLCS systems during this time
period with converted Establishments operating under the new VLCS which is
the objective of this RFP and those awaiting conversion operating under the
existing VLCS.
5.10.12 Historical Data: The Vendor MUST initially convert at least 36 months of
pre-existing data so that the Lottery will see a continuity of data in reports
from before, during, and after the startup. In addition to conversion of data
from the current system for reporting continuity, the Lottery currently requires
that all VLT data is maintained for the life of the machine. The Vendor will
develop a conversion process for historical data from both the Lottery’s
current and prior systems subject to the approval of the Lottery. Vendor’s
response MUST contain a description of this process detailing how and where
this data will be stored and how it will be retrieved.
5.10.13 The VLCS MUST be capable of accepting and processing machine and game
level adjustments at the VLT level, to include specification of financial
amounts (dollar and cent), the number of games played or won, amount
played or won, and an explanation for the adjustment. These adjustments are
designed to carry through all relevant reports and screens. Posting of
adjustments is designed to be allowed from management terminals by the
Lottery. The VLCS design provides for a single screen for meter adjustments.
The adjustment function is to be limited based on user or group security
rights.
5.11 Mandatory Deliverables
5.11.1 Project Deliverables: The Vendor MUST comply with all requirements in
this section related to report formats, timeframes and delivery.
5.11.1.1 Deliverable Submission and Acceptance Process: For each written
deliverable, draft and final, the Vendor MUST submit to the Lottery one hard
copy and one electronic copy.
5.11.1.2 Final Deliverable Drafts: 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
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scope and requirements of the associated final written deliverable. A draft
written deliverable may contain limited structural errors 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.
5.11.1.3 Format of Final Deliverable: Upon completion of a deliverable, the Vendor
MUST document each deliverable in final form to the Lottery for acceptance
and memorialize such delivery in a receipt of deliverable form to be provided
by the Lottery. The Lottery MUST countersign the receipt of deliverable
form indicating receipt of the contents described therein.
5.11.1.4 Acceptance Testing: Upon receipt of a final deliverable, the Lottery MUST
commence acceptance testing or review of the deliverable as required to
validate the completeness and quality in meeting requirements. Upon
completion of validation, the Lottery MUST issue to the Vendor notice of
acceptance or rejection of the deliverables in a certified acceptance of
deliverable form. In the event of rejection, the Vendor MUST correct the
identified deficiencies or non-conformities. Subsequent project tasks may not
continue until deficiencies with a deliverable are rectified and accepted by the
Lottery who has specifically issued in writing a waiver for conditional
continuance of project tasks. Once the Lottery’s issues have been resolved
and accepted by the Lottery, the Vendor will incorporate the resolutions into
the deliverable and resubmit the deliverable for acceptance.
5.11.1.5 Final Written Deliverables: 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
MUST 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;
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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; and,
Present information that is relevant to the section of the deliverable
being discussed.
5.11.2 Manuals: The Vendor MUST provide manuals and schematics as discussed in
this section, including timeframes for delivery.
5.11.2.1 Electronic Documents: The Vendor MUST provide, electronically to the
extent possible, all associated operation manuals, service manuals, and
relevant schematic diagrams, such as network circuit diagrams. Any
customization of third party software MUST be documented. Operation
manuals and service manuals MUST be expressed in terms that are directly
relevant to the approved and installed VLCS and searchable electronically.
5.11.2.2 Service Manuals: All service manuals MUST accurately depict the VLCS
which the manual is intended to cover.
5.11.2.3 Circuit Schematics: All circuit schematic diagrams MUST:
5.11.2.3.1 Accurately depict the PDC and BDC communications network(s)
and wiring at each Establishment (when such diagram becomes available);
5.11.2.3.2 Provide adequate detail with clear wording and visual images so
that qualified technical staff may perform an evaluation on the design of the
component; and,
5.11.2.3.3 Be professionally drafted and kept up-to-date at all times.
5.11.2.3.4 Updates MUST be submitted simultaneously with any testing
submission.
5.11.2.4 Preliminary Documents: All preliminary documents MUST be delivered
within thirty days of contract execution and Notice to Proceed so that the
Lottery and Vendor may collaborate during the business analysis phase to
ensure that the VLCS is developed with a mutual understanding of the
Lottery’s business processes and practices.
6. Interfaces/API’s – Mandatory Feature(s)
This section applies to any and all features in this RFP.
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The following API’s are not all inclusive, but serve as an example of potential
API’s; the Vendor shall provide a means to interface with their systems at the
Lottery’s request.
Retailer API
The Vendor shall propose solutions for allowing potential third parties to
programmatically query for retailer information such as locational, stocking,
and billing.
Customer/Player (CRM) API
The Vendor shall propose solutions for allowing potential third parties to
programmatically query for customer/player information.
Ticket Validation API
The Vendor shall propose solutions for allowing potential third parties to
programmatically check tickets.
Transaction/Sales API
The Vendor shall propose solutions for allowing potential third parties to
programmatically query for transactional and sales information.
7. Pricing
7.1. Introduction
This section describes the manner in which Vendors shall submit pricing for
the Lottery’s consideration. Vendors shall provide price quotes for all goods
and services to be furnished under the Proposal. The objective of the Price
Proposal is to document in a uniform format the cost of the features included
in the Technical Proposal.
The Lottery will consider a variety of pricing options, but to ensure
comparability between Vendors, Pricing Proposals shall at a minimum
comply with the following requirements:
A. The Pricing Proposal shall cover the entire term of the contract.
B. The Pricing Proposal may be based on a fixed-fee, percentage-of-sales, or
a combination of both methods.
C. The Lottery will pay the successful Vendor weekly over the term of the
contract based upon the Vendor’s invoice. A weekly invoice may include
weekly fees, a monthly or annual fee, as well as any one-time fees or
costs. Accordingly, the price proposal should identify all costs as fixed
(F) or variable (V) with the amount or percentage, or no cost (N/C). The
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invoicing period shall be shown as weekly (W), monthly (M), annual (A),
one-time (O), or special (S).
D. Pricing on the Price Proposal should also be broken down into the
following: Base System Price, Specified Options, Invited Options, and
Offered Options. The totals by category should be summarized.
E. If pricing varies between fiscal years, a Price Proposal Sheet shall be
completed for each of the Lottery’s fiscal years (July 1 through June 30
of the following year) encompassing the contract. If the price proposal is
based upon a percentage of sales for each year, then only the percentage
proposed for each year need be displayed:
Year 1 FY-2020
Year 2 FY-2021
Year 3 FY-2022
Year 4 FY-2023
Year 5 FY-2024
Year 6 FY-2025
Year 7 FY-2026
7.2. Letter of Transmittal
The price proposal must include a submittal letter signed by an individual
authorized to obligate the Vendor to the prices quoted. Those prices must be valid
for at least 240 days from the proposal submission date.
7.3. Price Proposal Requirements
Vendors shall submit their proposed pricing in a separate sealed envelope,
which shall accompany their entire proposal package. The proposed pricing
shall include a system, equipment and services that at a minimum meet all of
the terms and conditions, technical specifications, quantities and other
mandatory requirements of this RFP.
Price proposals shall include all items and/or features required by this RFP
and proposed by the Vendor, unless the Vendor specifically states that an item
or feature is offered as a separately priced option.
Vendors are required to propose pricing for mandatory features and Specified
Options; however, if a Vendor is unable to provide a mandatory feature or
Specified Option the Vendor shall specifically describe why it is unable to do
so and whether an alternative to said feature is proposed.
7.4. Pricing of Options
Any options the Vendor wishes to include as part of the base system should be
clearly marked by the Vendor as No Cost (N/C) options included in the base.
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Options that are separately priced shall be clearly noted in the technical
proposal, and their corresponding prices shall be listed as separate line items
in the pricing proposal. Any options that are included in a Vendor’s proposal
and are not priced shall be considered a No-Cost (N/C) item and part of the
base system.
In determining the pricing for additional equipment, a separate price shall be
provided for each equipment type (if the pricing is different)
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Appendix A: BIT Standard State Technology Contract Terms
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Appendix A: BIT Standard State Technology Contract Terms
CONFIDENTIALITY OF INFORMATION
For purposes of this paragraph, “State Proprietary Information” shall include all information disclosed to the
Consultant by the State. The Consultant, and Consultant’s Subcontractors, Agents, Assigns and/or Affiliated
Entities shall not disclose any State Proprietary Information to any third person for any reason without the express
written permission of a State officer or employee with authority to authorize the disclosure. The Consultant, and
Consultant’s Subcontractors, Agents, Assigns and/or Affiliated Entities shall not: (i) disclose any State Proprietary
Information to any third person unless otherwise specifically allowed under this agreement; (ii) make any use of
State Proprietary Information except to exercise rights and perform obligations under this agreement; (iii) make
State Proprietary Information available to any of its employees, officers, agents or third party Consultants except
those who have a need to access such information and who have agreed to obligations of confidentiality at least as
strict as those set out in this agreement. The Consultant, and Consultant’s Subcontractors, Agents, Assigns and/or
Affiliated Entities is held to the same standard of care in guarding State Proprietary Information as it applies to its
own confidential or proprietary information and materials of a similar nature, and no less than holding State
Proprietary Information in the strictest confidence. The Consultant, and Consultant’s Subcontractors, Agents,
Assigns and/or Affiliated Entities shall protect the confidentiality of the State’s information from the time of receipt
to the time that such information is either returned to the State or destroyed to the extent that it cannot be recalled or
reproduced. The Consultant, and Consultant’s Subcontractors, Agents, Assigns and/or Affiliated Entities agree to
return all information received from the State to State’s custody upon the end of the term of this agreement, unless
otherwise agreed in a writing signed by both parties. State Proprietary Information shall not include information
that:
(i) was in the public domain at the time it was disclosed to the Consultant, and Consultant’s
Subcontractors, Agents, Assigns and/or Affiliated Entities;
(ii) was known to the Consultant, and Consultant’s Subcontractors, Agents, Assigns and/or Affiliated
Entities without restriction at the time of disclosure from the State;
(iii) that was disclosed with the prior written approval of State’s officers or employees having authority to
disclose such information;
(iv) was independently developed by the Consultant, and Consultant’s Subcontractors, Agents, Assigns
and/or Affiliated Entities without the benefit or influence of the State’s information;
(v) becomes known to the Consultant, and Consultant’s Subcontractors, Agents, Assigns and/or Affiliated
Entities without restriction from a source not connected to the State of South Dakota.
State’s Proprietary Information can include names, social security numbers, employer numbers, addresses and other
data about applicants, employers or other clients to whom the State provides services of any kind. Consultant
understands that this information is confidential and protected under State law. The parties mutually agree that
neither of them nor any Consultant, and Consultant’s Subcontractors, Agents, Assigns and/or Affiliated Entities
shall disclose the contents of this agreement except as required by applicable law or as necessary to carry out the
terms of the agreement or to enforce that party’s rights under this agreement. Consultant acknowledges that the
State and its agencies are public entities and thus may be bound by South Dakota open meetings and open records
laws. It is therefore not a breach of this agreement for the State to take any action that the State reasonably believes
is necessary to comply with South Dakota open records or open meetings laws.
DISPOSAL OF STATE DATA
The Consultant, and Consultant’s Subcontractors, Agents, Assigns and/or Affiliated Entities shall securely dispose
of all data in all forms, such as disk, CD/ DVD, backup tape and paper, when requested by the State. Data shall be
permanently deleted and shall not be recoverable, according to National Institute of Standards and Technology
(NIST) approved methods. Certificates of Destruction shall be provided to the State upon request.
CYBER LIABILITY INSURANCE
The Consultant shall maintain cyber liability insurance with liability limits in the amount of $10,000,000 to protect
any and all State data the Consultant receives as part of the project covered by this agreement including State data
that may reside on devices, including laptops and smart phones, utilized by Consultant employees, whether the
device is owned by the employee or the Consultant. If the Consultant has a contract with a third-party to host any
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State data the Consultant receives as part of the project under this agreement, then the Consultant shall include a
requirement for cyber liability insurance as part of the contract between the Consultant and the third-party hosting
the data in question. The third-party cyber liability insurance coverage will include State data that resides on
devices, including laptops and smart phones, utilized by third-party employees, whether the device is owned by the
employee or the third-part Consultant. The cyber liability insurance shall cover expenses related to the management
of a data breach incident, the investigation, recovery and restoration of lost data, data subject notification, call
management, credit checking for data subjects, legal costs, and regulatory fines. Before beginning work under this
Agreement, the Consultant shall furnish the State with properly executed Certificates of Insurance which shall
clearly evidence all insurance required in this Agreement and which provide that such insurance may not be
canceled, except on 30 days prior written notice to the State. The Consultant shall furnish copies of insurance
policies if requested by the State. The insurance will stay in effect for 2 years after the work covered by this
agreement is completed.
CHANGE MANAGEMENT PROCESS
From time to time it may be necessary or desirable for either the State or the Consultant to propose changes to the
Services provided. Such changes shall be effective only if they are in writing and contain the dated signatures of
authorized representatives of both parties. Unless otherwise indicated, a change or amendment shall be effective on
the date it is signed by both parties. Automatic upgrades to any software used by the Consultant to provide any
services that simply improve the speed, efficiency, reliability, or availability of existing services and do not alter or
add functionality, are not considered “changes to the Services” and such upgrades will be implemented by the
Consultant on a schedule no less favorable than that provided by the Consultant to any other customer receiving
comparable levels of services.
WORK PRODUCTS
The Consultant shall be responsible for the professional quality, technical accuracy, timely completion, and
coordination of all services furnished by the Consultant and any subcontractors, if applicable, under this Agreement.
It shall be the duty of the Consultant to assure that the services and the system are technically sound and in
conformance with all pertinent Federal, State and local statutes, codes, ordinances, resolutions and other
regulations. The Consultant shall, without additional compensation, correct or revise any errors or omissions in its
work products.
Consultant hereby acknowledges and agrees that all reports, plans, specifications, technical data, miscellaneous
drawings, agreements, State Proprietary Information, any information discovered by the State, End User Data,
Personally Identifiable Information (PII), data protected under Family Educational Rights and Privacy Act
(FERPA), Personal Heath Information (PHI), Federal Tax Information (FTI) or any information defined under state
statute as confidential, and all information contained therein provided to the State by the Consultant in connection
with its performance under this Agreement shall belong to and is the property of the State and will not be used in
any way by the Consultant without the written consent of the State.
Papers, reports, forms or other material which are a part of the work under this Agreement will not be copyrighted
without written approval of the State. In the event that any copyright does not fully belong to the State, the State
reserves a royalty-free, non-exclusive, non-transferable and irrevocable license to reproduce, publish, and otherwise
use and to authorize others to use on the State’s behalf any such work for government purposes.
PRODUCT CONFORMITY
The State has twelve (12) months following final acceptance of the product(s) delivered by the Consultant pursuant
to this Agreement to verify that the product(s) conform to the requirements of this Agreement and perform
according to the Consultant’s system design specifications. Upon the State’s recognition of an error, deficiency, or
defect, the Consultant shall be notified by the State. The notification shall cite any specific deficiency (deficiency
being defined as the Consultant having performed incorrectly with the information previously provided by the State,
not the Consultant having to modify a previous action due to additional and/or corrected information from the State).
The Consultant, at no additional charge to the State, shall provide a correction or provide a mutually acceptable plan
for correction within thirty-days following the receipt of the State’s notice to the Consultant. If the Consultant’s
correction is inadequate to correct the deficiency, or defect, or if error recurs, the State may, at its option, act to
correct the problem. The Consultant shall be required to reimburse the State for any such costs incurred or the State
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will consider this to be a breach of the agreement. Payment by the Consultant pursuant to this provision does not
waive any other rights and remedies available to the State.
CURING OF BREACH OF AGREEMENT
In the event of a breach of these representations and warranties the State may, at the State’s discretion, provide the
Consultant with the opportunity to rectify the breach. The Consultant shall immediately, after notice from the State,
begin work on curing such breaches. If the notice is telephonic the State will provide, at the Consultant’s request, a
written notice to reaffirm the telephonic notice. If such problem remains unresolved after three days, at State’s
discretion, Consultant will send, at Consultant’s sole expense, at least one qualified and knowledgeable
representative to the State’s site where the system is located. This representative will continue to address and work
to remedy the deficiency, failure, malfunction, defect, or problem at the site. The rights and remedies provided in
this paragraph are in addition to any other rights or remedies provided in this Agreement or by law.
DOMAIN NAME OWNERSHIP
Any website(s) that the Consultant creates as part of this project must have the domain name registered by and
owned by the State. If as part of this project the Consultant is providing a service that utilizes a website with the
domain name owned by the Consultant, the Consultant must give thirty (30) days’ notice before abandoning the site.
If the Consultant intends to sell the site to another party the Consultant must give the State thirty days (30) notice
and grant the State the right of first refusal. For any site or domain, whether hosted by the Consultant or within the
State web infrastructure, any and all new web content should first be created in a development environment and then
subjected to security scan before being approved for a move up to the production level. This paragraph does not
include websites developed for the Consultant’s internal use.
SERVICE BUREAU
Consistent with use limitations specified in the agreement, the State may use the Product to provide services to the
various branches and constitutional offices of the State of South Dakota as well as county and city governments and
school districts. The State will not be considered a service bureau while providing these services and no additional
fees may be charged unless agreed to in writing by the State.
SOURCE CODE ESCROW
A. Deposit in Escrow: “Source Code” means all source code of the Software, together with all commentary
and other materials supporting, incorporated into or necessary for the use of such source code, including all
supporting configuration, documentation, and other resource files and identification by Consultant and
version number of any software (but not a license to such third-party software) used in connection with the
source code and of any compiler, assembler, or utility used in generating object code.
1. Within ninety (90) days of the effective date, Consultant shall deposit the Source Code for the
software with a nationally recognized software escrow company (subject to the approval of the State,
not to be unreasonably withheld) (the “Escrow Agreement”). Within thirty (30) days after delivery to
Customer of any major update, Consultant shall deposit the Source Code for such update with the
Escrow Agent pursuant to the Escrow Agreement. For all other updates, Consultant shall deposit the
Source Code for such updates on a semiannual basis with the Escrow Agent pursuant to the Escrow
Agreement.
2. The parties agree that the Escrow Agreement is an “agreement supplementary to” the Agreement as
provided in Section 365(d) of Title 11, United States Code (the “Bankruptcy Code”). Immediately
upon termination of this Agreement, the Source Code shall be released back to Consultant.
B. Conditions for release: The State will have the right to obtain the Source Code in accordance with and
subject to the terms and conditions of this Section and the Escrow Agreement provided that all of the
following three conditions are met (collectively a “Release Event”):
1. Consultant winds down its business or liquidates its business under a Chapter 7 Bankruptcy
proceeding; or Consultant discontinues maintenance and support to the Software,
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2. No entity has succeeded to Consultant’s obligations to provide maintenance and support on the
Software in accordance with the Agreement in effect between the parties, and
3. The State is not in breach of its obligations under this Agreement.
C. Source Code: In no event shall the State have the right to use the Source Code “barring a release event” for
any purpose, and the State is specifically prohibited from using the Source Code to reverse engineer,
develop derivative works or to sublicense the right to use the Source Code to any other person or entity for
any purpose. Customer will also be obligated to treat the Source Code as Confidential Information of
Consultant under the Agreement.
D. The cost for establishing and maintaining the Escrow Account will be that of the State.
PROVISION OF DATA
Upon notice of termination by either party, the State will be provided by the Consultant all current State Data and End
User Data in a non-proprietary form. Upon the effective date of the termination of the agreement, the State will again be
provided by the Consultant with all current State Data and End User Data in a non-proprietary form.
SECURITY INCIDENT NOTIFICATION
The Consultant will implement, maintain and update Security Incident procedures that comply with all State
standards and Federal requirements. A Security Incident is a violation of any BIT security or privacy policies or
contract agreements involving sensitive information, or the imminent threat of a violation. The BIT security
policies can be found in the Information Technology Security Policies attached to this RFP. The State requires
notification of a Security Incident involving any of the State’s sensitive data in the Vendor’s possession. The parties
agree that, to the extent probes and reconnaissance scans common to the industry constitute Security Incidents, this
Agreement constitutes notice by Consultant of the ongoing existence and occurrence of such Security Incidents for
which no additional notice to the State shall be required. Probes and scans include, without limitation, pings and
other broadcast attacks in the Consultant’s firewall, port scans, and unsuccessful log-on attempts, as long as such
probes and reconnaissance scans do not result in a Security Incident as defined above. Except as required by other
legal requirements the Consultant shall only provide notice of the incident to the State. The State will determine if
notification to the public will be by the State or by the Consultant. The method and content of the notification of the
affected parties will be coordinated with, and is subject to approval by the State, unless required otherwise by legal
requirements. If the State decides that the Consultant will be distributing, broadcasting to or otherwise releasing
information on the Security Incident to the news media, the State will decide to whom the information will be sent
and the State must approve the content of any information on the Security Incident before it may be distributed,
broadcast or otherwise released. The Consultant must reimburse the State for any costs associated with the
notification, distributing, broadcasting or otherwise releasing information on the Security Incident.
A. The Consultant shall notify the State Contact within one (1) hour of the Consultant becoming aware that a
Security Incident has occurred.
If notification of a Security Incident to the State Contact is delayed because it may impede a criminal
investigation or jeopardize homeland or federal security, notification must be given to the State within one
(1) hour after law-enforcement provides permission for the release of information on the Security Incident.
B. Notification of a Security Incident at a minimum is to consist of the nature of the data exposed, the time the
incident occurred and a general description of the circumstances of the incident. If not all of the
information is available for the notification within the specified time period Consultant shall provide the
State with all of the available information along with the reason for the incomplete notification. A delay in
excess of one (1) hour is acceptable only if it is necessitated by other legal requirements.
C. At the State’s discretion within twenty-four (24) hoursthe consultant must provide to the State all data
available including: (i) Name of and contact information for the Consultant’s Point of Contact for the
Security Incident: (ii) date and time of the Security Incident; (iii) date and time the Security Incident was
discovered: (iv) description of the Security Incident including the data involved, being as specific as
possible; (v) the potential number of records, and if unknown the range of records; (vi) address where the
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Security Incident occurred: and, (vii) the nature of the technologies involved. If not all of the information
is available for the notification within the specified time period Consultant shall provide the State with all
of the available information along with the reason for the incomplete information. A delay in excess of
twenty-four (24) hours is acceptable only if it is necessitated by other legal requirements.
For the purposes of this Agreement the Security Incident definition in the State’s Information Technology Security
Policy does not apply.
HANDLING OF SECURITY INCIDENT
At the State’s discretion the Consultant will preserve all evidence including but not limited to communications,
documents, and logs. The Consultant will also:
(i) fully investigate the incident,
(ii) cooperate fully with the State’s investigation of, analysis of, and response to the incident,
(iii) make a best effort to implement necessary remedial measures as soon as it is possible and,
(iv) document responsive actions taken related to the Security Incident, including any post-incident review
of events and actions taken to implement changes in business practices in providing the services
covered by this agreement.
At the State’s discretion and at the Consultant’s expense the Consultant will use a credit monitoring service, call
center, forensics company, advisors, or public relations firm services that are acceptable to the State. At the State’s
discretion the Consultant shall offer 2 year’s credit monitoring to each person whose data was compromised. The
State will set the scope of any investigation. The State can require a risk assessment of the Consultant, the State
mandating the methodology to be used as well as the scope. At the State’s discretion a risk assessment may be
performed by a third party at the Consultant’s expense.
If the Consultant is required by federal law or regulation to conduct a Security Incident or data breach investigation,
the results of the investigation must be reported to the State within one (1) hour of the investigation report being
completed. If the Consultant is required by federal law or regulation to notify the affected parties, the State must
also be notified, unless otherwise required by legal requirements.
Notwithstanding any other provision of this agreement, and in addition to any other remedies available to the State
under law or equity, the Consultant will reimburse the State in full for all costs incurred by the State in investigation
and remediation of the Security Incident including, but not limited, to providing notification to regulatory agencies
or other entities as required by law or contract. The Consultant shall also pay any and all legal fees, audit costs,
fines, and other fees imposed by regulatory agencies or contracting partners as a result of the Security Incident.
REJECTION OR EJECTION OF CONSULTANT, AND CONSULTANT’S SUBCONTRACTORS,
AGENTS, ASSIGNS AND/OR AFFILIATED ENTITIES EMPLOYEE(S)
The State, at its option, may require the vetting of any of the Consultant, and Consultant’s Subcontractors, Agents,
Assigns and/or Affiliated Entities. The Consultant is required to assist in this process as needed. The State reserves
the right to reject any person from the project who the State believes would be detrimental to the project or is
considered by the State to be a security risk.
The State reserves the right to require the Consultant to remove from the project any person the State believes is
detrimental to the project or is considered by the State to be a security risk. The State will provide the Consultant
with notice of its determination, and the reasons removal is deemed necessary. If the State signifies that a potential
security violation exists with respect to the request, the Consultant shall immediately remove the individual from the
project.
SECURITY ACKNOWLEDGEMENT FORM
The Consultant will be required to sign the Security Acknowledgement form which is attached to this RFP. The
signed Security Acknowledgement form must be submitted to the State and approved by the South Dakota Bureau
of Information and Telecommunications and communicated to the Consultant by the State contact before work on
the contract may begin. This form constitutes the agreement of Consultant to be responsible and liable for ensuring
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that the Consultant, Consultant’s employee(s), and Subcontractor’s, Agents, Assigns and or Affiliated Entities and
all of their employee(s), participating in the work will abide by the terms of the Information Technology Security
Policy- Vendor (ITSP) attached to this RFP. Failure to abide by the requirements of the ITSP or the Security
Acknowledgement form can be considered a breach of this Agreement at the discretion of the State. It is also a
breach of this Agreement, at the discretion of the State, if the Consultant does not sign another Security
Acknowledgement form covering any employee(s) and any Subcontractor’s, Agents, Assigns and or Affiliated
Entities employee(s), any of whom are participating in the work covered by this Agreement, and who begin working
under this Agreement after the project has begun. Any disciplining of the Consultant’s, Consultant’s employee(s) or
Subcontractor’s, Agents, Assigns and or Affiliated Entities employee(s) due to a failure to abide by the terms of the
Security Acknowledgement Form will be done at the discretion of the Consultant or Subcontractor’s, Agents,
Assigns and or Affiliated Entities and in accordance with the Consultant’s or Subcontractor’s, Agents, Assigns and
or Affiliated Entities personnel policies. Regardless of the actions taken by the Consultant and Subcontractor’s,
Agents, Assigns and or Affiliated Entities, the State shall retain the right to require at its discretion the removal of
the employee(s) from the project covered by this agreement.
INFORMATION TECHNOLOGY STANDARDS
Any software or hardware provided under this agreement will comply with state standards which can be found at
http://bit.sd.gov/standards/ .
LICENSE AGREEMENTS
Consultant warrants that it has provided to the State and incorporated into this agreement all license agreements,
End User License Agreements, and terms of use regarding its software or any software incorporated into its software
before execution of this agreement. Failure to provide all such license agreements, End User License Agreements,
and terms of use shall be a breach of this agreement at the option of the State. The parties agree that neither the State
nor its end users shall be bound by the terms of any such agreements not timely provided pursuant to this paragraph
and incorporated into this Agreement. Consultant agrees that it shall indemnify and hold the State harmless from
any and all damages or other detriment, actions, lawsuits or other proceedings that arise from failure to provide all
such license agreements, End User License Agreements, and terms of use or that arise from any failure to give the
State notice of all such license agreements, End User License Agreements, and terms of use. Any changes to the
terms of this Agreement or any additions or subtractions must first be agreed to by both parties in writing before
they go into effect. This paragraph shall control and supersede the language of any such agreements to the contrary.
THE STATE OF SOUTH DAKOTA TECHNOLOGY OVERSIGHT
Pursuant to South Dakota Codified Law 1-33-44, the Bureau of Information and Telecommunications ("BIT")
oversees the acquisition of office systems technology, software and services; telecommunication equipment,
software and services; and data processing equipment, software, and services for departments, agencies,
commissions, institutions and other units of state government. BIT requires the contract provisions which are
attached to this Agreement as Appendixes A and B and incorporated into this Agreement by reference. It is
understood and agreed to by all parties that BIT, as the State’s technology governing organization, has reviewed
only Appendixes A and B of this agreement.
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In Witness Whereof, the parties signify their agreement effective the date below first written by the signatures
affixed below. By signing this agreement, the Bureau of Information and Telecommunications (BIT) is representing
that as the State’s technology governing organization it has reviewed only the technical provisions of this agreement.
State Consultant
BY:_____________________________________
(Name)
BY:_____________________________________
(Name)
________________________________________
(Title and State Agency)
________________________________________
(Title)
________________________________________
(Date)
________________________________________
(Date)
BY:_____________________________________
(David Zolnowsky)
Bureau of Information and Telecommunications
(Commissioner)
________________________________________
(Date)
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Appendix B: Consultant Hosting and Software as a Service State Technology Contract Terms
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Appendix B: BIT Consultant Hosting, SaaS and Cloud Services State Technology Contract Template Terms
CONSULTANT ELECTION NOT TO RENEW CONTRACT OR TO INCREASE FEES
The Consultant is obligated to give the State one hundred and eighty (180) days written notice in the event the
Consultant intends not to renew the contract or intends to raise any fees or costs associated with the Consultant’s
products or services in a subsequent contract unless such fees or costs have previously been negotiated and included in
this contract.
DATA LOCATION
The Consultant shall provide its services to the State as well as storage of State data solely from data centers in the
continental United States. This restriction also applies to disaster recovery; any disaster recovery plan must provide
for data storage entirely within the continental United States. The Consultant shall not allow its personnel or
contractors to store State data on portable devices, including personal computers, except for devices that are used
and kept only at its data centers. The Consultant shall permit its personnel and contractors to access State data
remotely only as required to provide technical support.
DATA PROTECTION
Protection of personal privacy and data shall be an integral part of the business activities of the Consultant to ensure
there is no inappropriate or unauthorized use of State’s data at any time. To this end, the Consultant shall safeguard
the confidentiality, integrity and availability of State’s data and comply with the following conditions:
A. The Consultant shall implement and maintain appropriate administrative, technical and organizational
security measures to safeguard against unauthorized access, disclosure or theft of Personally Identifiable
Information (PII), data protected under the Family Educational Rights and Privacy Act (FERPA), Personal
Heath Information (PHI), Federal Tax Information (FTI) or any information that is confidential under state
law. Such security measures shall be in accordance with recognized industry practice and not less
protective than the measures the Consultant applies to its own non-public data.
B. At no time shall any data that either belong to or are intended for the use of the State or its officers, agents
or employees — be copied, disclosed or retained by the Consultant or any party related to the Consultant
for subsequent use in any transaction that does not include the State.
C. The Consultant will not use such data for the Consultant’s own benefit and, in particular, will not engage in
data mining of State’s data or communications, whether through automated or manual means, except as
specifically and expressly required by law or authorized in writing by the State through a State employee or
officer specifically authorized to grant such use of State data.
ACCESS TO SECURITY LOGS AND REPORTS
The Consultant shall provide reports to the State, as requested in a format as agreed to by both the Consultant and
the State. Reports shall include latency statistics, user access, user access IP address, user access history and security
logs for all State files related to this contract.
NON-DISCLOSURE AND SEPARATION OF DUTIES
The Consultant shall enforce separation of job duties and require non-disclosure agreements of all staff that have or
can have access to State data or the hardware that State data resides on. The Consultant will limit staff knowledge to
those staff who duties that require them to have access to the State’s data or the hardware the State’s data resides on.
BUSINESS CONTINUITY AND DISASTER RECOVERY
The Consultant shall provide a business continuity and disaster recovery plan upon request and ensure that the
State’s Recovery Time Objectives (RTOs) and Recovery Point Objectives (RPOs) as determined during negotiations
are met. For purposes of this contract, a “Disaster” shall mean any unplanned interruption of the operation of or
inaccessibility to the Consultant’s service in which the State, using reasonable judgment, requires relocation of
processing to a recovery location. The State shall notify the Consultant as soon as possible after the State deems a
service outage to be a Disaster.
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WEB SERVICES
The Consultant shall use Web services exclusively to interface with the State’s data.
STOLEN DATA LIABILITY
In no event shall the Consultant be liable for loss of good will, or for special, indirect, incidental, consequential or
punitive damages arising from the state’s use of the services of the Consultant, regardless of whether such claim
arises in tort or in contract.
If the state’s records or other data submitted for processing are lost or damaged as a result of any failure by the
Consultant, its employees or agents to exercise reasonable care to prevent such loss or damages the Consultant’s
liability on account of such loss or damages shall not exceed the reasonable cost of reproducing such records or data.
This limitation shall not apply in the event that the records or data cannot be reproduced at reasonable cost.
EXTRACTION OF DATA
Upon notice of termination by the Consultant or upon reaching the end of the term, any information stored in
repositories not hosted on the State’s infrastructure shall be extracted in a format to enable to State to load the
information onto\into repositories. If this is not possible the information metadata, including data structure
descriptions and data dictionary, and data will be extracted into a text file format and returned to the State. Upon the
effective date of the termination of the agreement the State again requires that State applications that store information
to repositories not hosted on the State’s infrastructure require the Consultant before termination (whether initiated by
the State or the Consultant) to extract the State’s information such that the state is able to load the information onto
or into repositories listed in the State’s standards. If the information cannot be extracted in a format that allows the
information to be loaded onto or into the State’s Standard repositories the information (metadata (data structure
descriptions) and data) will be extracted into a text file format and returned to the State. The Consultant recognizes
and agrees that the State cannot enter into an agreement providing for hosting of any of its data on the Consultant’s
servers and networks without provisions protecting its ability to access and recover its data in a usable, non-proprietary
format in the event of termination of this contract with sufficient time to convert that data and the business functions
provided by the Consultant to another system and Consultant.
INDEPENDENT AUDIT
The Consultant will disclose any independent audits that are attempted on any of its systems; disclosure of
information will be provided whether the audit or certification is successfully completed or not or whether the audit
process did not result in a positive outcome. The systems included under this requirement are the data centers,
servers, and applications being used by the Consultant. The Consultant will provide a copy of the detailed findings
of the audit(s) to the State.
FACILITIES INSPECTION
The Consultant grants authorized State and/or federal personnel access to inspect their systems, facilities, work
areas, contractual relationships with third parties involved in supporting any aspects of the hosted system, and the
systems that support/protect the hosted system. This access will be granted on 24-hour notice. Such personnel will
be limited to staff authorized by the state or the federal government to audit the system, and representatives of the
state entity that funds the hosting. The State accepts that access will be arranged with an escort, and the Consultant
commits that the escort will have the access and authority to provide physical access to facilities, answer appropriate
questions, and provide requested documentation, including but not limited to executed contract terms, operating
procedures, records of drills and tests, evidence of background checks, security logs, and any other items required by
state or federal audit requirements or as deemed by the State to be required to demonstrate the Consultant is
complying with all contract terms.
HOST FACILITY PHYSICAL SECURITY
The Consultant will provide documentation and, at the discretion of the State, allow for on-site inspections as
needed to demonstrate that all facilities supporting the application have adequate physical security. This includes, at
a minimum, centrally administered electronic locks that control entry and exit from all rooms where the hosted
system resides. Any door security system must either be connected to the building’s power backup system as
defined elsewhere or have internal battery power sufficient to last 24 hours in normal usage. Security events for the
physical access system must be logged and the logs stored electronically in a secure location in a non-changeable
format and must be searchable. Retention on the logs must be not less than 7 years. Log entries must be created for
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at least: successful entry and exit (indicating whether the access was to enter or exit the room) as well as all security
related events such as, doors left open more than 30 seconds, forced entries, failed entry attempts, repeat entries
without exit, repeat exits without entry, attempts to access doors for which access was not authorized. The
Consultant agrees to provide, at the State’s request, full access to search the security logs for any access or security
events related to any and all rooms and physical locations hosting the State’s system.
REDUNDANT POWER AND COOLING TO ALL HARDWARE
The Consultant will provide documentation and, at the discretion of the State, allow for on-site inspections as
needed to demonstrate all facilities supporting the application have adequate redundant power and cooling capacity
to operate uninterrupted, and without the need to refuel generators, for not less than 24 hours in the event the local
external power fails.
UPS BACKUP
The Consultant will provide documentation and, at the discretion of the State, allow for on-site inspections as
needed to demonstrate that all facilities supporting the application have adequate UPS power to carry the systems for
not less than 10 minutes, and to protect the system from power fluctuations including, but not limited to, surge,
spikes, sags, and instability.
RIGHTS AND LICENSE IN AND TO STATE DATA
The parties agree that between them, all rights including all intellectual property rights in and to State’s data shall
remain the exclusive property of the State, and that the Consultant has a limited, nonexclusive license to use these
data as provided in this Agreement solely for the purpose of performing its obligations hereunder,. This Agreement
does not give a party any rights, implied or otherwise, to the other’s data, content, or intellectual property, except as
expressly stated in the Agreement.
CESSATION OF BUSINESS
The Consultant will notify the State of impending cessation of its business or that of a tiered provider and the
Consultant’s contingency plan. This plan should include the immediate transfer of any previously escrowed assets
and data and State access to the Consultant’s facilities to remove or destroy any State-owned assets and data. The
Consultant shall implement its exit plan and take all necessary actions to ensure a smooth transition of service with
minimal disruption to the State. The Consultant will provide a fully documented service description and perform and
document a gap analysis by examining any differences between its services and those to be provided by its
successor. The Consultant will also provide a full inventory and configuration of servers, routers, other hardware,
and software involved in service delivery along with supporting documentation, indicating which if any of these are
owned by or dedicated to the State. The Consultant will work closely with its successor to ensure a successful
transition to the new equipment, with minimal downtime and impact on the State, all such work to be coordinated
and performed in advance of the formal, final transition date.
SERVICE LEVEL AGREEMENTS
The Consultant warrants that all services will be performed in a professional and workmanlike manner consistent
with industry standards reasonably applicable to such services. The Consultant further warrants that the services
will be operational at least 99.99% of the time in any given month during the term of this Agreement. In the event
of a service outage, the Consultant will:
A. Promptly and at the Consultant’s expense, use commercial best efforts to restore the services as soon as
possible, and
B. Unless the outage was caused by a Force Majeure event refund or credit the State, at the State’s election,
the pro-rated amount of fees corresponding to the time Services were unavailable or $100 US funds per
incident, whichever is the greater amount. For the purpose of this agreement, an incident, regardless of
time required to return to online position and whether re-keying of data is necessary to return, is defined as
any significant reduction in the availability of hosted services lasting more than one minute or resulting in
data loss, rework, or occurring more than 3 times in a 24 hour time period. For example, being forced
offline no more than twice in 24 hours would not be an incident if the user could get back online within 60
seconds and continue work where he or she left off. Being forced off line 3 times in a day would be an
incident, regardless. Being forced off line once in a 24 hour period of time, however, that resulted in the
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user having to rekey data that was lost would be an incident. Entering User authentication to log on shall
not be considered data entry.
The Consultant will provide the State with seven days prior notice of scheduled downtime in the provision of
services for maintenance or upgrades. To the extent possible, the Consultant will schedule downtime during times of
ordinarily low use by the State. In the event of unscheduled or unforeseen downtime for any reason, except as
otherwise prohibited by law, the Consultant will promptly notify the State and respond promptly to the State’s
reasonable requests for information regarding the downtime.
LEGAL REQUESTS FOR DATA
Except as otherwise expressly prohibited by law, the Consultant will:
A. Immediately notify the State of any subpoenas, warrants, or other legal orders, demands or requests
received by the Consultant seeking State data maintained by the Consultant,;
B. Consult with the State regarding its response;
C. Cooperate with the State’s requests in connection with efforts by the State to intervene and quash or modify
the legal order, demand or request; and
D. Upon the State’s request, provide the State with a copy of both the demand or request and its proposed or
actual response.
EDISCOVERY
The Consultant shall contact the State upon receipt of any electronic discovery, litigation holds, discovery searches,
and expert testimonies related to, or which in any way might reasonably require access to the data of the State. The
Consultant shall not respond to service of process, and other legal requests related to the State without first notifying
the State unless prohibited by law from providing such notice.
DATA RETENTION AND DISPOSAL
A. The Consultant will use commercially reasonable efforts to retain data in an End User’s account until the
End User deletes them, or for an alternate time period mutually agreed by the parties.
B. Using appropriate and reliable storage media, the Consultant will regularly back up State’s data and End
User Data and retain such backup copies for a minimum of thirty-six months. At the end of that time
period and at the State’s election, the Consultant will either securely destroy or transmit to the State
repository the backup copies. Upon the State’s request, the Consultant will supply the State with a
certificate indicating the nature of the storage media destroyed, the date destroyed, and the method of
destruction used.
C. The Consultant will retain logs associated with End User activity for a minimum of seven years, unless the
parties mutually agree to a different period.
D. The Consultant will immediately place a “hold” on the destruction under its usual storage media retention
policies of storage media that include State’s data and End User Data, in response to an oral or written
request from authorized State personnel indicating that those records may be relevant to litigation that the
State reasonably anticipates. Oral requests by the State for a hold on storage media destruction will be
reproduced in writing and supplied to the Consultant for its records as soon as reasonably practicable under
the circumstances. The State will promptly coordinate with the Consultant regarding the preservation and
disposition of storage media. The Consultant shall continue to preserve the storage media until further
notice by the State. The Consultant will provide documentation and, at the discretion of the State, allow for
on-site inspections as needed to demonstrate that all facilities supporting the methods of disposal of storage
media, are appropriate to and fulfill all of the State’s needs. By way of example but not of limitation, all
hard drives and tapes used to store State data must, upon destruction be properly disposed of.
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MULTI-TENANT ARCHITECTURE LOGICALLY/PHYSICALLY SEPARATED TO INSURE DATA
SECURITY
The Consultant will provide documentation and, at the discretion of the State, allow for on-site inspections as
needed to demonstrate that all facilities supporting the application have adequate safeguards to assure that needed
logical and physical separation is in place and enforced to insure data security, physical security, and transport
security.
ACCESS ATTEMPTS
All access attempts, whether failed or successful, to any system connected to the hosted system which can access,
read, alter, intercept, or otherwise impact the hosted system or its data or data integrity shall be logged by the
Consultant. For all systems, the log must include at least: log-in page used, username used, time and date stamp,
incoming IP for each authentication attempt, and the authentication status, whether successful or not. Logs must be
maintained not less than 7 years in a searchable database in an electronic format that is un-modifiable. At the
request of the state, access must be granted to search those logs as needed to demonstrate compliance with the terms
of this contract, and any and all audit requirements related to the hosted system.
PASSWORD POLICIES
Password policies for all Consultant employees will be documented annually and provided to the state to assure
adequate password protections are in place. Logs and administrative settings will be provided to the state on request
to demonstrate such policies are actively enforced.
APPLICATION OF CONTRACT TERMS
All of the following terms and provisions are applicable to each and every entity that hosts State data. If the
Consultant is proposing to subcontract any hosting of State data to another entity, the relationship between
Consultant and any such subcontracting entity must be that of Principal and Agent. No such Agent may act as an
independent contractor for Consultant. Consultant must include in its contract with any such Agent explicit terms
providing for this Principal and Agent relationship, and Consultant must further supervise such Agent so as to insure
that such Agent complies with all of the following terms.
THIRD PARTY HOSTING
If the Consultant has the State’s data and or End User’s Data hosted by another party the Consultant must provide
the State the name of this party The Consultant must provide the State with contact information for this third party
and the location of their data center(s). The Consultant must receive from the third party written assurances that the
state’s data and or End User Data will reside in the continental United States at all times and provide these written
assurances to the State. If during the term of this agreement the consultant changes from the Consultant hosting the
data to a third-party hosting the data or changes third-party hosting provider, the Consultant will provide the State
with one hundred and eighty (180) days’ advance notice of this change and at that time provide the state with the
information required above.
SECURING OF DATA
All facilities used to store and process State’s data and or End User Data will employ commercial best practices,
including appropriate administrative, physical, and technical safeguards, to secure such data from unauthorized
access, disclosure, alteration, and use. Such measures will be no less protective than those used to secure the
Consultant’s own data of a similar type, and in no event less than commercially reasonable in view of the type and
nature of the data involved. Without limiting the foregoing, the Consultant warrants that all State’s data and or End
User Data will be encrypted in transmission (including via web interface) and storage at no less than AES256 level
encryption with SHA256 or SHA2 hashing.
SECURITY PROCESSES
The Consultant shall disclose its non-proprietary security processes and technical limitations to the State such that
adequate protection and flexibility can be attained between the State and the Consultant. For example: virus
checking and port sniffing.
IMPORT AND EXPORT OF DATA
The State shall have the ability to import or export data piecemeal or in entirety at its discretion without interference
from the Consultant. This includes the ability for the State to import or export data to/from other Consultants.
SD Lottery On-Line Central System and Video Lottery Central System 2018 Page 183 of 229
SCANNING AND AUDIT AUTHORIZATION
The Consultant will provide the State at no cost and at a date, time and for duration agreeable to both parties,
authorization to scan and access to a test system containing test data for security scanning activities. The system and
data provided to the State by Consultant for testing purposes will be considered a test system containing test data.
The State will not scan any environment known by the State to be a production environment at the time the scan is
performed by the State. Consultant provides their consent for the State or any third-party acting for the State to scan
the systems and data provided as the State wishes using any methodology that the State wishes. Any scanning
performed by the State will not be considered a violation of any licensure agreements the State has with the
Consultant or that the consultant has with a third-party.
The Consultant will also allow the State at the State’s expense, not to include Consultant’s expenses, to perform up
to two security audit and vulnerability assessments per year to provide verification of Consultant’s IT security
safeguards for the system and its data. The State will work with the Consultant to arrange the audit at a time least
likely to create workload issues for the Consultant and will accept scanning a test or UAT environment on which the
code and systems are a mirror image of the production environment.
The Consultant indemnifies the state for ordinary, consequential and incidental damages to the Consultant’s
computer system and the data it contains that is the result of scanning. Scanning by the State or any third-party
acting for the State will not be considered reverse engineering. If the State’s security scans discover security issues
the State may collaborate, at the State’s discretion with, the Consultant on remediation efforts. These remediation
efforts will not be considered a violation of any licensure agreements between the State and Consultant. The State
while engaged, and after, with the Consultant on remediation is indemnified and held harmless from all actions,
lawsuits, damages (including all ordinary, consequential and incidental damages) or other proceedings that arise
from security scanning, remediation efforts, and any after effects of security scanning or remediation. This
indemnification includes all defense costs as well as reasonable attorneys’ fees the State of South Dakota is required
to pay in any such proceedings. The State will not be charged for any costs incurred by the consultant in these
remediation efforts unless agreed to by the State in advance in writing. In the event of conflicting language this
clause supersedes any other language in this or any other agreement made between the State and the Consultant.
The Consultant agrees to work with the State to rectify any serious security issues revealed by the security audit and
or security scanning. This includes additional security audits and security scanning that shall be performed after any
remediation efforts to confirm the security issues have been resolved and no further security issues exist.
SD Lottery On-Line Central System and Video Lottery Central System 2018 Page 184 of 229
Appendix C: Cost Proposal Worksheet
SD Lottery On-Line Central System and Video Lottery Central System 2018 Page 185 of 229
Appendix C: Cost Sheet
Cost information below as detailed in the Request for Proposal and submitted in a separate
sealed envelope. Cost should be clearly marked. Vendors may request an separate electronic
copy of Appendix C for use in completing their Price Proposal(s).
This RFP is intended to have a total refresh of all hardware in the final years of the original
contract pursuant to negotiations of the contract extensions. The Vendor should include the
projected costs of anticipated software upgrades and related installation refresh years. Each
independent testing laboratory approved by the Lottery will be responsible for acquiring its own
hardware including connectivity to the Vendor. It is intended by the Lottery that the initial
software (Video Lottery Central System and/or On-line Central System) will be made available to
these laboratories with the costs for the base installation of that software included in this
response.
If the vendor wishes to submit a cost proposal that includes pricing for both systems together
rather than separate, they should still supply two copies of this worksheet with the prices broken
down between the two systems. If the vendor submits such a cost proposal, the two worksheets
must be clearly marked to indicate that they are a joint cost proposal for both systems. As
indicated above, vendors are not restricted to one cost proposal.
Components Purchase
1. Basic License and Service Fee. These
amounts shall be the annual fee to cover
all hardware, software, licenses, training,
and conversion to include all hardware and
software maintenance costs for the initial
eighty-four (84) months of the contract.
This fee should be in percentage of sales
for the On-line Central System and
percentage of Net Machine Income for the
Video Lottery Central System. Cost is to
be included for each year of the seven-year
period. No more than twenty (20) percent of the total seven (7) year costs
are allowed in any one year.
Year 1: ___________
Year 2: ___________
Year 3: ___________
Year 4: ___________
Year 5: ___________
Year 6: ___________
Year 7: ___________
2. Renewal License and Service Fee.
This amount shall be the fee to cover all
hardware, software, licenses and training, to
include all hardware and software
maintenance costs for each of the optional
eight (8) one (1) year renewal years of the
contract.
Year 1: ___________
Year 2: ___________
Year 3: ___________
Year 4: ___________
Year 5: ___________
Year 6: ___________
Year 7: ___________
Year 8: ___________
3. Total Basic and Renewal Fees ___________________
SD Lottery On-Line Central System and Video Lottery Central System 2018 Page 186 of 229
Specified Optional Services: A separate price quote for options requested which may be
purchased under a contract resulting from this RFP. If a specified option is to be included in the
base system price, indicate in the table and mark the price as N/C (No Charge). If additional
space is needed, attach an additional sheet using the format of the table below.
Specified Optional Services
a. $
b. $
c. $
d. $
e. $
f. $
g. $
h. $
i. $
j. $
k. $
Invited Optional Services: A separate price quote (not mandatory) for options invited to be
offered by the Vendor which may be purchased under a contract resulting from this RFP. If an
invited option is to be included in the base system price, indicate in the table and mark the price
as N/C (No Charge). (Attach a description for each commodity and/or service):
Invited Optional Services
a. $
b. $
c. $
d. $
e. $
f. $
g. $
h. $
i. $
j. $
k. $
Offered Optional Services: A separate price quote (not mandatory) for options not
specifically requested but may be offered which may be purchased under a contract resulting
from this RFP. (Attach a description for each commodity and/or service):
Offered Optional Services
SD Lottery On-Line Central System and Video Lottery Central System 2018 Page 187 of 229
a. $
b. $
c. $
d. $
e. $
f. $
g. $
h. $
i. $
j. $
k. $
SD Lottery On-Line Central System and Video Lottery Central System 2018 Page 188 of 229
Appendix D: Annual Revenues
SD Lottery On-Line Central System and Video Lottery Central System 2018 Page 189 of 229
FY 2017 FY 2016 FY 2015 FY 2014 FY 2013 FY 2012
Annual Sales, Audited $23,009,677 $28,992,932 $25,340,133 $28,580,432 $32,048,317 $28,365,084
Gross Gaming Revenue $11,416,492 $14,408,165 $12,525,977 $14,093,914 $15,843,265 $14,013,601
GGR as Percentage of Sales 49.62% 49.70% 49.43% 49.31% 49.44% 49.40%
Sales Growth (%) -20.64% 14.42% -11.34% -10.82% 12.99%
GGR Growth (%) -20.76% 15.03% -11.12% -11.04% 13.06%
FY 2017 FY 2016 FY 2015 FY 2014 FY 2013 FY 2012
Annual Cash-In, Audited $702,820,214 $678,898,195 $641,668,506 $590,520,297 $580,092,145 $550,055,033
Net Machine Income $212,376,196 $207,602,544 $199,129,996 $185,246,728 $184,640,564 $176,644,130
NMI as Percentage of Cash-In 30.22% 30.58% 31.03% 31.37% 31.83% 32.11%
Cash-In Growth (%) 3.52% 5.80% 8.66% 1.80% 5.46%
NMI Growth (%) 2.30% 4.25% 7.49% 0.33% 4.53%
On-Line Sales
Video Lottery Net Machine Income
SD Lottery On-Line Central System and Video Lottery Central System 2018 Page 190 of 229
Appendix E: Draw Game Sales By Week
SD Lottery On-Line Central System and Video Lottery Central System 2018 Page 191 of 229
Powerball Dakota Cash Wild Card 2 Hot Lotto Mega Millions Lucky for Life Lotto America Grand Total
Jul 04, 2015 $192,678 $34,297 $32,793 $67,638 $70,276 $397,682
Jul 11, 2015 $175,394 $37,018 $33,631 $46,940 $76,728 $369,711
Jul 18, 2015 $184,314 $38,705 $34,112 $45,279 $88,055 $390,465
Jul 25, 2015 $192,092 $42,509 $34,173 $46,854 $73,203 $388,831
Aug 01, 2015 $231,294 $45,055 $34,607 $46,707 $52,623 $410,286
Aug 08, 2015 $178,729 $46,009 $34,177 $46,347 $53,032 $358,294
Aug 15, 2015 $185,443 $50,120 $36,301 $46,809 $52,965 $371,638
Aug 22, 2015 $195,682 $52,146 $35,683 $46,606 $54,301 $384,418
Aug 29, 2015 $219,501 $54,510 $36,181 $46,462 $57,001 $413,655
Sep 05, 2015 $241,924 $43,342 $39,168 $49,311 $63,284 $437,029
Sep 12, 2015 $244,923 $25,672 $41,169 $48,562 $64,979 $425,305
Sep 19, 2015 $287,180 $26,465 $42,679 $50,656 $48,581 $455,561
Sep 26, 2015 $366,503 $27,715 $32,999 $52,114 $51,308 $530,639
Oct 03, 2015 $330,749 $30,012 $33,585 $53,596 $56,141 $504,083
Oct 10, 2015 $211,674 $30,070 $33,546 $54,112 $58,564 $387,966
Oct 17, 2015 $185,105 $31,208 $33,087 $53,760 $60,392 $363,552
Oct 24, 2015 $208,719 $33,389 $33,513 $55,335 $70,512 $401,468
Oct 31, 2015 $221,960 $35,233 $33,225 $55,569 $83,164 $429,151
Nov 07, 2015 $218,011 $37,876 $34,977 $56,887 $86,724 $434,475
Nov 14, 2015 $173,333 $40,021 $33,208 $56,735 $108,337 $411,634
Nov 21, 2015 $173,557 $42,738 $30,595 $57,101 $48,082 $352,073
Nov 28, 2015 $194,539 $43,767 $29,460 $57,275 $48,615 $373,656
Dec 05, 2015 $215,904 $47,476 $30,880 $58,882 $52,825 $405,967
Dec 12, 2015 $250,250 $51,663 $32,798 $50,688 $57,208 $442,607
Dec 19, 2015 $272,597 $27,724 $34,184 $43,125 $58,597 $436,227
Dec 26, 2015 $330,132 $27,170 $35,247 $42,228 $67,153 $501,930
Jan 02, 2016 $577,411 $31,013 $39,316 $48,313 $75,319 $771,372
Jan 09, 2016 $3,573,643 $43,687 $47,052 $62,824 $100,428 $3,827,634
Jan 16, 2016 $3,577,938 $43,966 $45,289 $57,624 $67,535 $3,792,352
Jan 23, 2016 $217,016 $36,387 $40,946 $48,657 $51,719 $394,725
Jan 30, 2016 $215,241 $37,746 $42,311 $48,777 $54,105 $398,180
Feb 06, 2016 $236,673 $41,069 $43,173 $43,795 $56,958 $421,668
Feb 13, 2016 $240,500 $42,285 $43,113 $43,487 $55,399 $424,784
Feb 20, 2016 $262,668 $46,292 $45,795 $45,172 $57,971 $457,898
Feb 27, 2016 $280,141 $50,632 $32,769 $46,877 $62,397 $472,816
Mar 05, 2016 $241,654 $55,762 $50,544 $67,171 $415,131
Mar 12, 2016 $182,666 $58,750 $48,026 $60,589 $350,031
Mar 19, 2016 $186,522 $62,138 $48,999 $47,379 $345,038
Mar 26, 2016 $197,852 $65,238 $48,626 $48,542 $360,258
Apr 02, 2016 $219,599 $74,319 $50,529 $51,200 $395,647
Apr 09, 2016 $230,961 $54,042 $52,309 $53,674 $390,986
Apr 16, 2016 $256,235 $29,961 $53,580 $54,437 $394,213
Apr 23, 2016 $283,394 $29,914 $53,570 $57,660 $424,538
Apr 30, 2016 $335,236 $32,009 $54,569 $62,463 $484,277
May 07, 2016 $564,235 $33,928 $58,190 $68,647 $725,000
May 14, 2016 $175,936 $28,509 $55,756 $75,604 $335,805
May 21, 2016 $182,818 $28,414 $56,131 $81,165 $348,528
May 28, 2016 $189,715 $28,931 $56,255 $93,683 $368,584
Jun 04, 2016 $207,507 $27,971 $57,494 $96,684 $389,656
Jun 11, 2016 $211,632 $28,196 $56,560 $104,081 $400,469
Jun 18, 2016 $222,949 $29,052 $57,747 $117,076 $426,824
Jun 25, 2016 $234,144 $31,577 $56,602 $141,171 $463,494
Draw Game Sales by Week
SD Lottery On-Line Central System and Video Lottery Central System 2018 Page 192 of 229
Jul 02, 2016 $295,237 $36,087 $60,608 $204,089 $596,021
Jul 09, 2016 $334,893 $38,687 $61,692 $456,527 $891,799
Jul 16, 2016 $330,796 $39,161 $61,485 $59,878 $491,320
Jul 23, 2016 $365,325 $42,116 $62,698 $56,306 $526,445
Jul 30, 2016 $678,653 $39,509 $68,324 $56,830 $843,316
Aug 06, 2016 $193,669 $29,278 $70,817 $58,123 $351,887
Aug 13, 2016 $203,166 $29,130 $56,092 $58,663 $347,051
Aug 20, 2016 $223,869 $31,580 $45,359 $62,342 $363,150
Aug 27, 2016 $237,958 $32,835 $47,987 $64,668 $383,448
Sep 03, 2016 $249,745 $52,188 $44,914 $67,702 $414,549
Sep 10, 2016 $252,363 $52,912 $45,291 $68,387 $418,953
Sep 17, 2016 $284,182 $57,074 $47,015 $72,876 $461,147
Sep 24, 2016 $174,783 $61,312 $45,735 $49,912 $331,742
Oct 01, 2016 $189,021 $71,349 $47,241 $53,335 $360,946
Oct 08, 2016 $197,591 $75,549 $46,911 $55,720 $375,771
Oct 15, 2016 $217,465 $75,752 $47,215 $51,980 $392,412
Oct 22, 2016 $230,606 $78,095 $47,484 $49,267 $405,452
Oct 29, 2016 $239,510 $83,930 $47,714 $50,258 $421,412
Nov 05, 2016 $276,572 $44,366 $52,861 $54,618 $428,417
Nov 12, 2016 $294,379 $42,719 $50,977 $54,476 $442,551
Nov 19, 2016 $332,391 $42,005 $50,580 $55,637 $480,613
Nov 26, 2016 $472,458 $43,561 $52,801 $46,182 $615,002
Dec 03, 2016 $173,955 $39,497 $53,122 $48,983 $315,557
Dec 10, 2016 $181,584 $38,914 $52,825 $49,220 $322,543
Dec 17, 2016 $208,410 $39,722 $52,109 $52,031 $352,272
Dec 24, 2016 $200,139 $45,890 $57,616 $59,918 $363,563
Dec 31, 2016 $187,137 $45,968 $54,159 $59,843 $347,107
Jan 07, 2017 $187,998 $48,005 $53,553 $65,822 $355,378
Jan 14, 2017 $203,876 $51,943 $54,688 $69,501 $380,008
Jan 21, 2017 $219,097 $56,029 $55,511 $73,241 $403,878
Jan 28, 2017 $217,247 $56,669 $53,559 $74,437 $401,912
Feb 04, 2017 $273,721 $66,161 $58,293 $48,308 $446,483
Feb 11, 2017 $297,994 $68,477 $57,573 $48,944 $472,988
Feb 18, 2017 $373,198 $57,599 $62,097 $51,551 $544,445
Feb 25, 2017 $433,207 $41,802 $66,787 $55,209 $597,005
Mar 04, 2017 $190,094 $41,225 $69,700 $64,102 $365,121
Mar 11, 2017 $202,408 $41,786 $68,363 $66,361 $378,918
Mar 18, 2017 $218,583 $44,654 $65,754 $67,852 $396,843
Mar 25, 2017 $203,121 $47,813 $67,146 $72,283 $390,363
Apr 01, 2017 $179,208 $49,378 $66,815 $82,506 $377,907
Apr 08, 2017 $169,283 $52,351 $69,178 $49,465 $340,277
Apr 15, 2017 $181,665 $56,759 $68,665 $50,123 $357,212
Apr 22, 2017 $188,345 $62,442 $66,910 $51,673 $369,370
Apr 29, 2017 $212,618 $65,699 $67,814 $54,394 $400,525
May 06, 2017 $221,521 $67,304 $67,738 $47,788 $404,351
May 13, 2017 $235,343 $68,959 $66,721 $48,338 $419,361
May 20, 2017 $274,921 $71,747 $68,675 $49,595 $464,938
May 27, 2017 $302,235 $78,066 $68,338 $52,310 $500,949
Jun 03, 2017 $364,286 $80,794 $68,384 $53,142 $566,606
Jun 10, 2017 $502,092 $86,587 $71,094 $56,736 $32,532 $749,041
Jun 17, 2017 $165,490 $86,064 $69,098 $65,156 $40,502 $426,310
Jun 24, 2017 $175,996 $92,169 $68,346 $69,674 $39,662 $445,847
SD Lottery On-Line Central System and Video Lottery Central System 2018 Page 193 of 229
Jul 01, 2017 $201,894 $97,714 $71,716 $64,374 $40,678 $476,376
Jul 08, 2017 $205,799 $100,098 $68,457 $74,538 $42,274 $491,166
Jul 15, 2017 $218,650 $103,559 $70,390 $82,520 $42,930 $518,049
Jul 22, 2017 $232,573 $109,044 $70,551 $87,803 $43,784 $543,755
Jul 29, 2017 $246,639 $110,442 $68,773 $91,297 $45,298 $562,449
Aug 05, 2017 $300,650 $122,800 $73,089 $115,379 $48,594 $660,512
Aug 12, 2017 $484,523 $130,003 $78,002 $193,449 $51,932 $937,909
Aug 19, 2017 $937,980 $177,370 $85,159 $60,575 $52,684 $1,313,768
Aug 26, 2017 $1,272,020 $189,790 $88,599 $60,507 $58,502 $1,669,418
Sep 02, 2017 $187,336 $173,075 $82,188 $53,672 $47,506 $543,777
Sep 09, 2017 $195,557 $114,613 $82,496 $52,385 $47,316 $492,367
Sep 16, 2017 $205,289 $42,838 $84,299 $55,347 $48,360 $436,133
Sep 23, 2017 $168,945 $42,439 $83,746 $62,052 $47,658 $404,840
Sep 30, 2017 $179,387 $42,551 $83,716 $44,748 $48,718 $399,120
Oct 07, 2017 $195,695 $44,609 $80,587 $47,025 $48,706 $416,622
Oct 14, 2017 $204,712 $38,771 $80,110 $46,374 $47,122 $417,089
Oct 21, 2017 $219,286 $39,129 $80,286 $41,233 $47,200 $427,134
Oct 28, 2017 $194,611 $38,048 $84,135 $40,778 $46,716 $404,288
Nov 04, 2017 $178,158 $47,095 $71,541 $50,408 $347,202
Nov 11, 2017 $183,008 $48,127 $66,782 $52,606 $350,523
Nov 18, 2017 $193,466 $43,166 $66,403 $48,518 $45,248 $396,801
Nov 25, 2017 $200,899 $37,052 $68,113 $47,196 $43,307 $396,567
Dec 02, 2017 $222,254 $39,934 $76,142 $48,176 $46,958 $433,464
Dec 09, 2017 $229,624 $39,242 $76,789 $48,746 $46,778 $441,179
Dec 16, 2017 $267,090 $43,898 $86,346 $50,438 $48,767 $496,539
Dec 23, 2017 $340,883 $49,094 $103,281 $53,022 $50,916 $597,196
Dec 30, 2017 $465,238 $49,639 $162,810 $50,926 $48,530 $777,143
Jan 06, 2018 $1,065,760 $66,029 $411,937 $60,290 $57,074 $1,661,090
SD Lottery On-Line Central System and Video Lottery Central System 2018 Page 194 of 229
Appendix F: Sales Runs on Jackpots
SD Lottery On-Line Central System and Video Lottery Central System 2018 Page 195 of 229
Draw # Draw Date Jackpot Annuity Powerball Sales Draw # Draw Date Jackpot Annuity Powerball Sales
1 11/07/2015 $40,000,000 $92,317 1 06/14/2017 $40,000,000 $82,802
2 11/11/2015 $50,000,000 $85,213 2 06/17/2017 $53,000,000 $82,688
3 11/14/2015 $60,000,000 $88,120 3 06/21/2017 $65,000,000 $86,802
4 11/18/2015 $70,000,000 $88,844 4 06/24/2017 $78,000,000 $89,194
5 11/21/2015 $80,000,000 $84,713 5 06/28/2017 $91,000,000 $94,466
6 11/25/2015 $90,000,000 $104,582 6 07/01/2017 $109,000,000 $107,428
7 11/28/2015 $100,000,000 $89,957 7 07/05/2017 $123,000,000 $99,773
8 12/02/2015 $110,000,000 $103,937 8 07/08/2017 $140,000,000 $106,026
9 12/05/2015 $128,000,000 $111,967 9 07/12/2017 $155,000,000 $109,370
10 12/09/2015 $145,000,000 $125,188 10 07/15/2017 $170,000,000 $109,280
11 12/12/2015 $161,000,000 $125,062 11 07/19/2017 $186,000,000 $113,187
12 12/16/2015 $180,000,000 $123,266 12 07/22/2017 $201,000,000 $119,386
13 12/19/2015 $204,000,000 $149,331 13 07/26/2017 $218,000,000 $121,028
14 12/23/2015 $232,000,000 $185,775 14 07/29/2017 $242,000,000 $125,611
15 12/26/2015 $261,000,000 $144,357 15 08/02/2017 $262,000,000 $135,830
16 12/30/2015 $301,000,000 $231,008 16 08/05/2017 $287,000,000 $164,820
17 01/02/2016 $355,000,000 $346,403 17 08/09/2017 $323,000,000 $217,355
18 01/06/2016 $528,000,000 $1,148,671 18 08/12/2017 $371,000,000 $267,168
19 01/09/2016 $947,000,000 $2,424,972 19 08/16/2017 $432,000,000 $350,291
20 01/13/2016 $1,586,000,000 $3,452,880 20 08/19/2017 $541,000,000 $587,689
21 08/23/2017 $758,000,000 $1,185,564
Draw # Draw Date Jackpot Annuity Powerball Sales Draw # Draw Date Jackpot Annuity Powerball Sales
1 03/27/2013 $40,000,000 $107,515 1 12/08/2012 $40,000,000 $116,095
2 03/30/2013 $40,000,000 $122,710 2 12/12/2012 $50,000,000 $122,939
3 04/03/2013 $50,000,000 $125,032 3 12/15/2012 $60,000,000 $126,178
4 04/06/2013 $50,000,000 $124,997 4 12/19/2012 $70,000,000 $130,648
5 04/10/2013 $60,000,000 $105,420 5 12/22/2012 $80,000,000 $133,018
6 04/13/2013 $70,000,000 $128,653 6 12/26/2012 $90,000,000 $145,185
7 04/17/2013 $80,000,000 $132,420 7 12/29/2012 $100,000,000 $158,227
8 04/20/2013 $95,600,000 $141,953 8 01/02/2013 $110,000,000 $161,671
9 04/24/2013 $116,000,000 $152,112 9 01/05/2013 $126,300,000 $177,276
10 04/27/2013 $139,400,000 $164,831 10 01/09/2013 $145,600,000 $181,069
11 05/01/2013 $163,800,000 $185,683 11 01/12/2013 $163,500,000 $183,025
12 05/04/2013 $193,800,000 $209,724 12 01/16/2013 $187,400,000 $208,299
13 05/08/2013 $222,000,000 $252,336 13 01/19/2013 $219,200,000 $247,273
14 05/11/2013 $279,000,000 $280,699 14 01/23/2013 $262,900,000 $311,960
15 05/15/2013 $363,900,000 $528,330 15 01/26/2013 $327,000,000 $525,154
16 05/18/2013 $590,500,000 $1,441,130 16 01/30/2013 $587,500,000 $2,031,340
Sales Runs on Powerball Jackpots above $500 Million
SD Lottery On-Line Central System and Video Lottery Central System 2018 Page 196 of 229
Draw # Draw Date Jackpot Annuity Powerball Sales Draw # Draw Date Jackpot Annuity Powerball Sales
1 12/03/2014 $40,000,000 $97,273 1 10/28/2017 $40,000,000 $77,987
2 12/06/2014 $50,000,000 $93,430 2 11/01/2017 $50,000,000 $89,145
3 12/10/2014 $60,000,000 $94,837 3 11/04/2017 $62,000,000 $89,013
4 12/13/2014 $70,000,000 $99,362 4 11/08/2017 $75,000,000 $91,980
5 12/17/2014 $80,000,000 $95,079 5 11/11/2017 $89,000,000 $91,028
6 12/20/2014 $90,000,000 $106,080 6 11/15/2017 $103,000,000 $97,583
7 12/24/2014 $100,000,000 $144,740 7 11/18/2017 $120,000,000 $95,883
8 12/27/2014 $110,000,000 $95,928 8 11/22/2017 $134,000,000 $109,873
9 12/31/2014 $120,000,000 $130,537 9 11/25/2017 $147,000,000 $91,026
10 01/03/2015 $132,000,000 $120,706 10 11/29/2017 $161,000,000 $106,884
11 01/07/2015 $146,000,000 $121,795 11 12/02/2017 $178,000,000 $115,370
12 01/10/2015 $160,000,000 $123,920 12 12/06/2017 $194,000,000 $109,820
13 01/14/2015 $176,000,000 $134,368 13 12/09/2017 $211,000,000 $119,804
14 01/17/2015 $190,000,000 $141,330 14 12/13/2017 $230,000,000 $127,106
15 01/21/2015 $211,000,000 $166,595 15 12/16/2017 $249,000,000 $139,984
16 01/24/2015 $235,000,000 $179,935 16 12/20/2017 $272,000,000 $154,532
17 01/28/2015 $259,000,000 $205,048 17 12/23/2017 $309,000,000 $186,351
18 01/31/2015 $285,000,000 $225,430 18 12/27/2017 $340,000,000 $171,237
19 02/04/2015 $324,000,000 $323,026 19 12/30/2017 $390,000,000 $294,001
20 02/07/2015 $394,000,000 $468,573 20 01/03/2017 $460,900,000 $430,527
21 02/11/2015 $564,000,000 $1,172,336 21 01/06/2017 $559,000,000 $635,233
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Appendix G: Instant Sales by Price Point
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CY & MM $1 $2 $3 $5 $10 $20 Grand Total
2016 $2,758,886 $5,016,832 $4,792,377 $7,414,840 $3,628,940 $2,571,100 $26,182,975
1 $340,822 $528,068 $391,536 $596,055 $288,990 $213,000 $2,358,471
2 $212,182 $505,160 $401,487 $518,065 $346,780 $220,140 $2,203,814
3 $182,700 $525,602 $437,283 $517,035 $408,360 $238,000 $2,308,980
4 $196,694 $434,126 $376,449 $537,265 $278,710 $223,760 $2,047,004
5 $188,731 $377,662 $381,714 $579,905 $312,050 $239,840 $2,079,902
6 $188,639 $365,900 $417,399 $642,110 $288,810 $210,380 $2,113,238
7 $153,336 $320,750 $387,636 $596,360 $272,470 $218,880 $1,949,432
8 $229,706 $394,470 $400,131 $665,855 $287,510 $223,300 $2,200,972
9 $180,141 $324,428 $358,650 $640,755 $247,110 $202,240 $1,953,324
10 $171,555 $359,674 $439,221 $760,030 $280,580 $187,200 $2,198,260
11 $231,439 $337,642 $367,860 $629,390 $279,900 $182,460 $2,028,691
12 $482,941 $543,350 $433,011 $732,015 $337,670 $211,900 $2,740,887
2017 $3,081,454 $4,516,608 $4,895,418 $7,313,895 $3,958,100 $3,709,940 $27,475,415
1 $249,517 $328,764 $387,450 $609,785 $297,680 $203,720 $2,076,916
2 $218,779 $321,036 $397,485 $590,565 $299,410 $153,160 $1,980,435
3 $266,606 $419,120 $464,169 $754,630 $341,890 $257,180 $2,503,595
4 $216,563 $310,554 $362,727 $610,450 $316,220 $249,600 $2,066,114
5 $269,087 $333,632 $374,496 $627,530 $363,050 $255,140 $2,222,935
6 $235,605 $351,730 $395,268 $626,570 $336,020 $246,640 $2,191,833
7 $218,371 $391,476 $385,233 $630,470 $330,440 $262,800 $2,218,790
8 $208,914 $355,798 $390,396 $633,985 $352,750 $313,180 $2,255,023
9 $271,361 $364,144 $370,368 $567,065 $320,630 $440,900 $2,334,468
10 $194,468 $357,362 $416,406 $549,675 $288,460 $445,060 $2,251,431
11 $261,102 $405,516 $420,477 $514,985 $275,580 $418,800 $2,296,460
12 $471,081 $577,476 $530,943 $598,185 $435,970 $463,760 $3,077,415
Grand Total $5,840,340 $9,533,440 $9,687,795 $14,728,735 $7,587,040 $6,281,040 $53,658,390
Instant Sales by Price Point
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Appendix H: Retailers by City
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City Retailers City Retailers City Retailers City Retailers
ABERDEEN 20 DOLAND 1 MARION 1 VIBORG 1
ALCESTER 1 EDGEMONT 2 MARTIN 5 VOLGA 3
ALEXANDRIA 1 ELK POINT 3 MELLETTE 1 WAGNER 6
ARLINGTON 2 ELKTON 1 MENNO 1 WAKONDA 1
ARMOUR 1 EMERY 1 MIDLAND 1 WALL 3
ARTESIAN 1 ESTELLINE 1 MILBANK 5 WATERTOWN 22
AURORA 1 EUREKA 1 MILLER 2 WAUBAY 1
AVON 1 FAITH 2 MINA 1 WEBSTER 4
BALTIC 2 FAULKTON 2 MITCHELL 20 WESSINGTON 2
BELLE FOURCHE 7 FEDORA 1 MOBRIDGE 4 WESSINGTON SPRINGS 1
BERESFORD 4 FLANDREAU 4 MURDO 2 WHITE 1
BIG STONE CITY 2 FORT PIERRE 4 NEW UNDERWOOD 1 WHITE LAKE 2
BISON 2 FREEMAN 2 NEWELL 2 WHITE RIVER 2
BLACK HAWK 2 GARRETSON 1 NORTH SIOUX CITY 4 WHITEWOOD 2
BLUNT 2 GEDDES 2 OACOMA 4 WILLOW LAKE 1
BONESTEEL 2 GETTYSBURG 3 ONIDA 1 WILMOT 1
BOWDLE 1 GREGORY 3 PARKER 1 WINFRED 1
BOX ELDER 3 GROTON 2 PARKSTON 2 WINNER 5
BRADLEY 1 HARRISBURG 2 PEEVER 1 WOLSEY 1
BRANDON 6 HARROLD 1 PHILIP 3 WOOD 1
BRITTON 3 HARTFORD 2 PICKSTOWN 1 WOONSOCKET 1
BROOKINGS 15 HENRY 1 PIEDMONT 1 WORTHING 1
BUFFALO 1 HERMOSA 2 PIERRE 15 YANKTON 21
BURBANK 1 HERREID 1 PLANKINTON 2
BURKE 2 HIGHMORE 2 PLATTE 4
CANISTOTA 1 HILL CITY 2 PRESHO 2
CANTON 3 HOT SPRINGS 7 RAPID CITY 66
CASTLEWOOD 2 HOVEN 1 REDFIELD 6
CENTERVILLE 1 HOWARD 1 ROSHOLT 1
CENTRAL CITY 1 HUMBOLDT 1 ROWENA 1
CHAMBERLAIN 6 HURLEY 1 SALEM 1
CHANCELLOR 1 HURON 17 SCOTLAND 1
CHESTER 1 IPSWICH 1 SELBY 1
CLAREMONT 1 IRENE 1 SIOUX FALLS 88
CLARK 2 JEFFERSON 1 SISSETON 3
CLEAR LAKE 3 KADOKA 2 SPEARFISH 11
COLMAN 1 KIMBALL 1 SPENCER 1
COLOME 1 LAKE ANDES 2 SPRINGFIELD 3
COLTON 1 LAKE NORDEN 1 STICKNEY 1
CORSICA 1 LAKE PRESTON 2 STURGIS 10
CROOKS 1 LANGFORD 1 SUMMERSET 1
CUSTER 5 LEAD 3 SUMMIT 1
DAKOTA DUNES 1 LEMMON 2 TEA 3
DE SMET 3 LENNOX 4 TORONTO 1
DEADWOOD 3 LEOLA 1 TRIPP 1
DELL RAPIDS 5 MADISON 7 VERMILLION 7
On-line Retailers by City
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Appendix I: Establishments & Terminals by City
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City Establishments Terminals City Establishments Terminals City Establishments Terminals
Aberdeen 52 385 Chancellor 2 20 Gettysburg 6 32
Akaska 2 5 Chester 2 9 Glenham 2 4
Alcester 4 29 Claire City 1 2 Gregory 6 32
Alexandria 3 11 Claremont 1 3 Grenville 2 11
Alpena 1 6 Clark 2 5 Groton 5 25
Altamont 1 3 Clear Lake 4 19 Harrisburg 5 37
Amherst 1 3 Colman 3 25 Hartford 4 29
Andover 1 4 Colome 1 4 Hayti 1 6
Arlington 5 35 Colton 1 7 Hecla 1 8
Armour 3 15 Corona 2 5 Henry 2 9
Artesian 2 7 Corsica 1 4 Hermosa 4 32
Aurora 2 13 Corson 1 10 Herreid 2 12
Avon 3 12 Crocker 1 2 Herrick 1 2
Baltic 3 14 Crooks 3 18 Highmore 3 19
Belle Fourche 11 73 Custer 8 59 Hill City 4 23
Belvidere 1 4 Dakota Dunes 1 2 Hosmer 2 4
Beresford 7 47 Dallas 1 9 Hot Springs 12 98
Big Stone City 7 60 Davis 1 4 Hoven 2 10
Bison 2 7 De Smet 4 29 Howard 2 10
Black Hawk 7 60 Deadwood 3 10 Hudson 2 20
Blunt 2 8 Dell Rapids 4 29 Humboldt 3 28
Bonesteel 2 10 Delmont 1 2 Hurley 2 7
Bowdle 2 8 Dimock 1 6 Huron 28 221
Box Elder 9 85 Doland 2 6 Interior 3 16
Bradley 1 4 Eden 1 8 Ipswich 4 17
Brandon 12 105 Edgemont 3 24 Irene 3 17
Brandt 1 4 Egan 1 4 Jefferson 2 18
Bridgewater 1 3 Elk Point 5 30 Kadoka 6 36
Bristol 2 6 Elkton 2 13 Kaylor 1 2
Britton 4 29 Ellsworth AFB 1 7 Kennebec 1 3
Brookings 22 168 Estelline 1 3 Keystone 2 8
Bruce 2 7 Ethan 1 3 Kimball 4 16
Bryant 1 3 Eureka 1 4 Kranzburg 2 5
Buffalo 4 16 Faith 4 23 Lake Andes 4 26
Buffalo Gap 1 2 Faulkton 2 11 Lake City 2 14
Burbank 2 13 Ferney 1 2 Lake Norden 1 5
Burke 4 20 Flandreau 3 27 Lake Preston 1 5
Camp Crook 2 7 Florence 1 3 Langford 2 9
Canistota 2 12 Forestburg 1 2 Lead 3 10
Canova 2 5 Fort Pierre 8 56 Lebanon 1 4
Canton 6 38 Frederick 1 4 Lemmon 7 33
Carthage 1 5 Freeman 4 32 Lennox 6 48
Castlewood 3 19 Garretson 5 27 Leola 1 3
Centerville 3 14 Gary 4 26 Lesterville 1 3
Central City 1 4 Gayville 1 3 Letcher 2 6
Chamberlain 10 54 Geddes 2 7 Ludlow 1 6
Establishments & Terminals by City
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City Establishments Terminals City Establishments Terminals City Establishments Terminals
Madison 12 79 Revillo 1 3 Whitewood 3 17
Marion 2 9 Rockerville 1 6 Willow Lake 2 11
Martin 7 59 Roscoe 1 4 Wilmot 3 9
Marvin 1 3 Rosholt 2 11 Winfred 1 6
Meckling 1 4 Roslyn 1 4 Winner 9 55
Mellette 1 5 Saint Onge 1 5 Wolsey 2 12
Menno 4 23 Salem 5 17 Wood 1 5
Midland 2 11 Scotland 1 3 Woonsocket 3 19
Milbank 8 52 Selby 4 19 Worthing 2 14
Miller 4 30 Sherman 1 4 Yankton 45 354
Mina 2 6 Sioux Falls 147 1328
Mission Hill 1 6 Sisseton 9 64
Mitchell 40 332 South Shore 2 6
Mobridge 13 70 Spearfish 17 121
Monroe 1 2 Spencer 1 8
Montrose 1 2 Springfield 2 18
Mound City 1 4 Stickney 2 5
Mount Vernon 2 9 Strandburg 1 4
Murdo 3 24 Sturgis 10 73
New Effington 1 5 Summerset 3 28
New Underwood 2 12 Summit 3 18
Newell 3 17 Tabor 1 3
Nisland 1 3 Tea 5 43
North Sioux City 56 549 Toronto 3 12
Nunda 1 4 Trent 1 5
Oacoma 4 26 Tripp 3 8
Oelrichs 4 34 Tulare 1 3
Onida 3 15 Twin Brooks 1 6
Parker 2 12 Tyndall 3 20
Parkston 4 21 Valley Springs 1 10
Peever 2 8 Veblen 1 6
Philip 4 31 Vermillion 18 117
Pickstown 3 11 Viborg 2 11
Piedmont 3 21 Vivian 1 6
Pierpont 1 4 Volga 4 25
Pierre 34 281 Wagner 8 65
Plankinton 4 25 Wakonda 2 6
Platte 5 26 Wall 4 30
Pollock 3 13 Ward 1 3
Presho 3 11 Warner 1 4
Pukwana 2 5 Watertown 50 367
Quinn 1 3 Waubay 7 37
Ramona 1 4 Webster 6 45
Rapid City 103 942 Wessington Springs 3 19
Redfield 8 50 White 2 7
Reliance 1 4 White Lake 3 10
Renner 3 24 White River 4 31
Establishments & Terminals by City
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Appendix J: Security and Vendor Questions
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Appendix J Security and Vendor Questions
Vendors: The following questions are asked to help BIT determine the best ways to integrate your product with the State’s technology infrastructure. Some questions may not apply but please review all of them. You will see that this is divided into sections to help identify the point of the questions. Use the last column as needed to explain your answers. Please note that many questions explicitly ask you to explain your response. Where we feel that a Yes/No/NA response is not appropriate, the cell has been greyed out. The “BIT” column corresponds to the branch that will be the primary reviewers. If you have questions about the meaning or intent of a question, we can contact them on your behalf. DAT = Data Center; DEV = Development; TEL = Telecommunications; PMO = Project Management office
Section: System Security - Applicable to All Proposals
The following questions pertain to all vendors, contractors or third-parties engaged in this system, and pertain to relevant security practices for your system, coding, and business processes.
Response
# BIT Question YES NO NA Explain answer as needed A1 DAT Is a user required to change their password? How often? What are
the complexity requirements for the passwords? (BIT password requirements are available in Section 230.67.4.4 of the Information Technology Security Policy which can be supplied upon request).
A2 DEV TEL
Will the system implement its own level of security?
A3 DAT TEL x
Will the system provide Internet security functionality on public portals using encrypted network/secure socket layer connections in line with current recommendations of the Open Web Application Security Project (OWASP)?
A4 TEL x Will the system provide Internet security functionality on a public portal to include firewalls?
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A5 PMO Will the system distinguish between local versus global administrators where local administrators have rights to user management only for the program area that they are associated with and global administrators have rights for the entire system?
A6 DAT TEL
Does the application contain mitigations for risks associated to uncontrolled login attempts (response latency, re-Captcha, lockout, IP filtering, Multi Factor authentication)? Which mitigations are in place? What are the optional mitigations?
A7 DAT TEL
Are account credentials hashed and encrypted when stored?
A8 DAT TEL x
The State does not allow applications to be placed on the State’s system, or the State’s system to connect to another system, or the consultant to store or process State data without first doing security scans. The State would want to scan a test system; not a production system. Scanning would also take place annually as well as when there are code changes. Are either of these an issue? If so, please explain.
A9 DAT Will SSL traffic be decrypted and inspected? A10 PMO
x Will organizations other than the State of South Dakota have access to our data?
A11 PMO Will the State’s data be protected?
A12 DEV TEL
Describe the training your company offers related to defining security requirements, secure architecture and design, secure coding practices, and security testing.
A13 DEV TEL
Do you have developers that possess software security related certifications (e.g., the SANS secure coding certifications)?
A14 DEV Are there some requirements for security that are “structured” as part of general releasability of a product and others that are “as needed” or “custom” for a particular release?
A15 TEL What process is utilized by your company to prioritize security related enhancement requests?
A16 TEL What threat assumptions were made, if any, when designing protections for the software and information assets processed?
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A17 TEL How do you minimize the threat of reverse engineering of binaries? Are source code obfuscation techniques used?
A18 TEL What security criteria, if any, are considered when selecting third-party suppliers?
A19 TEL How has the software been measured/assessed for its resistance to identified, relevant attack patterns such as Common Vulnerabilities & Exposures (CVE®) or Common Weakness Enumerations (CWEs)? How have the findings been mitigated?
A20 TEL Has the software been evaluated against the Common Criteria, FIPS 140-2, or other formal evaluation process? If so, please describe what evaluation assurance level (EAL) was achieved, what protection profile the product claims conformance to, and indicate if the security target and evaluation report are available.
A21 DAT TEL
Are static or dynamic software security analysis tools used to identify weaknesses in the software that can lead to exploitable vulnerabilities? If yes, which tools are used? What classes of weaknesses are covered? When in the SDLC are these scans performed? Are SwA experts involved in the analysis of the scan results?
A22 DAT TEL x
Has the product undergone any penetration testing? If yes, when, by whom, and are the test reports available under a nondisclosure agreement? How have the findings been mitigated?
A23 DEV Are there current publicly-known vulnerabilities in the software (e.g., an unrepaired CWE entry)? If yes, please explain.
A24 DAT Does your company publish a security section on its website? If so, do security researchers have the ability to report security issues?
A25 DAT Does your company have an executive-level officer responsible for the security of your company’s software products and/or processes?
A26 DAT Are security requirements developed independently of the rest of the requirements engineering activities? Or are they integrated into the mainstream requirements activities?
A27 DAT Does the software have any security critical dependencies or need additional controls from other software (e.g., operating system, directory service, application), firmware, or hardware? If yes, please
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describe.
A28 DAT What risk management measures are used during the software’s design to mitigate risks posed by use of third-party components?
A29 DAT Does your company perform background checks on members of the software development team? If so, are there any additional “vetting” checks done on people who work on critical application components, such as security? Explain.
A30 DEV Does your company have formally defined security policies associated with clearly defined roles and responsibilities for personnel working within the software development life cycle? Explain.
A31 TEL What are the policies and procedures used to protect sensitive information from unauthorized access? How are the policies enforced?
A32 DAT Is two-factor authentication used for administrative control of all security devices and critical information systems?
A33 DAT TEL
Do you have an automated security event management system?
A34 DAT Are security logs and audit trails protected from tampering or modification?
A35 DAT It is State policy that if your system connects to another system providing SaaS, IaaS, or PaaS that this system has a security scan. The State would want to scan a test system; not a production system. Is this an issue? If so, please explain.
A36 DAT x
A) Will the system support authentication?
B) Does the system give clues about valid username or password content or structure, for example when a user forgets their username or after a failed login attempt?
C) Are usernames and passwords generated by the system using user-specific information such as last name or birthdate?
If Yes to these, please explain.
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A37 DEV Are security-specific regression tests performed during the development process? If yes, how frequently are the tests performed?
A38 TEL What type of firewalls (or application gateways) do you use? How are they monitored/managed?
A39 TEL What type of Intrusion Detection System/Intrusion Protection Systems (IDS/IPS) do you use? How are they monitored/managed?
A40 DAT TEL
What are your procedures for intrusion detection, incident response, and incident investigation/escalation?
A41 DAT How do you control physical and electronic access to the log files? Are log files consolidated to single servers?
A42 DAT TEL
Describe your security testing processes.
A43 DAT TEL
Do you have a BYOD policy that allows your staff to put any sort of sensitive or legally protected State data on their device personal device(s) or other non-company owned system(s)?
A44 DAT TEL
Do you require multifactor authentication be used by employees and subcontractors who have potential access to legally protected State data? If yes, please explain your practices on multifactor authentication including the authentication level used as defined in NIST 800-63 in your explanation. If no, do you plan on going to multifunction authentication? If so, when?
A45 PMO Will this system provide the capability to track data entry/access by the person, date and time?
A46 DAT DEV PMO TEL
Will the system provide data encryption for sensitive or legally protected information both at rest and transmission? If yes, please provide details.
A47 DAT a. Do you have a SOC 2 audit report? b. Is the audit done annually? c. Does the audit cover all 5 of the trust principles? d. Does the audit include subservice providers? e. Has the auditor always been able to attest to an acceptable
audit result?
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f. Will you provide a copy of your latest SOC 2 audit upon request, a redacted version is acceptable.
A48 DAT TEL
Are you providing a device or software that is a part of the Internet of Things (IoT)? If yes, what is your process for ensuring the software on your IoT devices that are connected to the state’s system, either permanently or intermittently, are maintained and/or updated?
Section: Hosting
Only for vendor/cloud hosted applications, systems, databases and any other technology not hosted on the State's infrastructure.
Response
# BIT Question YES NO NA Explain answer as needed B1 PMO Typically the State of South Dakota prefers to host all systems. In
the event that the State decides that it would be preferable for the vendor to host the system, is this an option?
B2 PMO Are there expected periods of time where the application will be unavailable for use?
B3 DAT If you have agents or scripts executing on servers of hosted applications and what are the procedures for reviewing the security of these scripts or agents?
B4 DAT What are the procedures and policies used to control access to the servers? How are audit logs maintained?
B5 DAT DEV PMO TEL
Do you have a formal disaster recovery plan? Please explain what actions will be taken to recover from a disaster? Are warm or hot backups available?
B6 DAT What are the set of controls to ensure separation of data and security information between different customers that are physically located in the same data center? On the same host server?
B7 DAT What are your data backup policies and procedures? How frequently are your backup procedures verified?
B8 DAT Are you or if the data is being hosted by a subservice provider are they FedRAMP certified?
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B9 DAT DEV TEL
If any cloud services are provided by a third-party, do you have contractual requirements with them dealing with: · Security for their I/T systems; · Staff vetting; · Staff security training?
If yes, summarize the contractual requirements. If yes, how do you evaluate the third-party’s adherence to the
contractual requirements?
B10 DAT If your application is hosted by you or a third party, are all costs for your software licenses in addition to third-party software (i.e. MS-SQL, MS Office, and Oracle) included in your cost proposal? If so, will you provide copies of the licenses with a line-item list of their proposed costs before they are finalized?
Section: Database
Applies to any application that stores data.
Response
# BIT Question YES NO NA Explanation C1 DAT Will the system require a database? C2 DAT Will the system infrastructure require database replication? C3 DAT Will the system require transaction logging for database recovery? C4 DAT
DEV How does data enter the system (transactional or batch or both)?
C5 PMO Is the system data exportable by the user for use in tools like Excel or Access?
C6 PMO Will user customizable data elements be exportable also?
C7 DAT DEV PMO
Will the State of South Dakota have access to the underlying data and data model for ad hoc reporting purposes? If yes, will the access be on-site or off-site?
C8 DAT DEV
Will the system infrastructure include a separate OLTP or Data Warehouse Implementation?
C9 DAT DEV
Will the system infrastructure require a Business Intelligence solution?
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Section: Vendor Process - Applicable to all proposals
The following questions pertain to all vendors, contractors or third-parties engaged in this system, and pertain to relevant business practices.
Response
# BIT Question YES NO NA Explain answer as needed D1 DAT
PMO Will the vendor provide assistance with installation?
D2 DAT DEV PMO TEL
Does your company have a policy and process for supporting/requiring professional certifications? If so, how do you ensure certifications are valid and up-to date?
D3 TEL In preparation for release, are undocumented functions in the software disabled, test/debug code removed, and source code comments sanitized?
D4 DEV What types of functional tests are/were performed on the software during its development (e.g., spot checking, component-level testing and integrated testing)?
D5 TEL Who and when are security tests performed on the product? Are tests performed by an internal test team, by an independent third party, or by both?
D6 DEV Are misuse test cases included to exercise potential abuse scenarios of the software?
D7 TEL What release criteria does your company have for its products with regard to security?
D8 DEV What controls are in place to ensure that only the accepted/released software is placed on media for distribution?
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D9 DAT DEV
Is there a Support Lifecycle Policy within the organization for the software in question? Does it outline and establish a consistent and predictable support timeline?
D10 DAT How will patches and/or Service Packs be distributed to the Acquirer?
D11 DEV What services does the help desk, support center, or (if applicable) online support system offer and when are these services available?
D12 DAT DEV
How extensively are patches and Service Packs tested before they are released?
D13 DAT Can patches and Service Packs be uninstalled? Are the procedures for uninstalling a patch or Service Pack automated or manual?
D14 DAT DEV
How are reports of defects, vulnerabilities, and security incidents involving the software collected, tracked, and prioritized?
D15 DAT How do you set the relative severity of defects and how do you prioritize their remediation?
D16 DAT What are your policies and practices for reviewing design and architecture security impacts in relation to deploying patches?
D17 DAT Are third-party developers contractually required to follow your configuration management policies?
D18 DEV What policies and processes does your company use to verify that software components do not contain unintended, “dead,” or malicious code? What tools are used?
D19 DEV How is the software provenance verified (e.g. any checksums or signatures)?
D20 DEV Does the documentation explain how to install, configure, and/or use the software securely? Does it identify options that should not normally be used because they create security weaknesses?
D21 DAT Does your company’s defect classification scheme include security categories?
D22 DAT Is a validation test suite or diagnostic available to validate that the application software is operating correctly and in a secure configuration following installation?
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D23 DEV Does your company develop security measurement objectives for phases of the SDLC? Has your company identified specific statistical and/or qualitative analytical techniques for measuring attainment of security measures?
D24 DEV How is the assurance of software produced by third-party developers assessed?
D25 DEV Does your company have a vulnerability management and reporting policy? Is it available for review?
D26 DAT What are the procedures for evaluating any vendor security alerts and installing patches and Service Packs?
D27 DAT Is testing done after changes are made to servers? What are your rollback procedures in the event of problems resulting from installing a patch or Service Pack?
D28 DAT What are your procedures and policies for handling and destroying sensitive data on electronic and printed media?
D29 DAT TEL
How are virus prevention, detection, correction, and updates handled for the products?
D30 DAT TEL
Do you perform regular reviews of system and network logs for security issues?
D31 DAT Do you provide security performance measures to the customer at regular intervals?
D32 DAT PMO
Is there an installation guide available and will you provide a copy to the State?
D33 DAT DEV PMO
Will the implementation plan include user acceptance testing?
D34 DAT DEV PMO TEL
Will the implementation plan include performance testing?
D35 DAT DEV PMO TEL
What technical documentation will be provided to the State?
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D36 DEV PMO
Will there be documented test cases for future releases including any customizations done for the State of South Dakota?
D37 PMO Is the user manual electronically available and can the manual be printed?
D38 PMO Describe your Support and on-line assistance options and any additional costs associated with the options.
D39 DAT PMO
Is there a method established to communicate availability of system updates?
D40 DEV PMO
If the State of South Dakota will gain ownership of the software, does the proposal include a knowledge transfer plan?
D41 DEV PMO
Has your company ever conducted a project where your product was load tested?
D42 DEV PMO
Have you ever created a User Acceptance Test plan and test cases? If yes, what were the test cases? Do you do software assurance?
D43 PMO Is there a strategy for mitigating unplanned disruptions and what is it?
D44 DAT Please explain the pedigree of the software. Include in your answer who are the people, organization and processes that created the software.
D45 DAT Explain the change management procedure used to identify the type and extent of changes allowed in the software throughout its lifecycle. Include information on the oversight controls for the change management procedure.
D46 TEL Does your company have corporate policies and management controls in place to ensure that only corporate-approved (licensed and vetted) software components are used during the development process? Provide a brief explanation. Will the supplier indemnify the Acquirer from these issues in the license agreement? Provide a brief explanation.
D47 DEV What are the processes (e.g., ISO 9000, CMMi), methods, tools (e.g., IDEs, compilers) techniques, etc. used to produce and transform the software (brief summary response)?
D48 DAT DEV
Does the software contain third-party developed components? If yes, are those components scanned by a static code analysis tool?
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D49 DAT DEV TEL
What security design and security architecture documents are prepared as part of the SDLC process? How are they maintained? Are they available to/for review?
D50 DEV Does your organization incorporate security risk management activities as part of your software development methodology? If yes, please provide a copy of this methodology or provide information on how to obtain it from a publicly accessible source.
D51 DAT Does the organization ever perform site inspections/policy compliance audits of its U.S. development facilities? Of its non-U.S. facilities? Of the facilities of its third-party developers? If yes, how often do these inspections/audits occur? Are they periodic or triggered by events (or both)? If triggered by events, provide examples of “trigger” events.
D52 DEV When does security testing occur during the SDLC (e.g., unit level, subsystem, system, certification and accreditation)?
D53 DAT TEL
How are trouble tickets submitted? How are support issues, specifically those that are security-related escalated?
D54 DAT TEL
Do you perform penetration testing of the service? If yes, how frequently are penetration tests performed? Are the tests performed by internal resources or by a third party?
D55 DAT How frequently is the security tests performed? Are the tests performed by internal resources or by a third party?
D56 DAT DEV
Please describe the scope and give an overview of the content of the security training you require of your staff, include how often the training is given and to whom.
D57 DAT TEL
What is your process for ensuring the software on your IoT devices that are connected to your system, either permanently or intermittently, is maintained and updated?
D58 DAT TEL x
It is State policy that all Vendor/Vendor Remote Access to systems for support and maintenance on the State Network will only be allowed through Citrix Netscaler. Would this affect the implementation of the system?
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D59 PMO TEL x
The Vendors/Vendors are also expected to reply to follow-up questions in response to the answers they provided to the security questions. At the State’s discretion, a vendor’s answers to the follow-up questions may be required in writing and/or verbally. The answers provided may be used as part of the vendor selection criteria. Is this acceptable?
D60 DAT DEV PMO TEL x
(For PHI only) a. Have you done a risk assessment? If yes, will you share it?
b. If you have not done a risk assessment, would you be willing to do one based on the Health and Human Services assessment tool (https://www.healthit.gov/providers-professionals/security-risk-assessment-tool)? If yes, will you share it? The State is willing to sign a Non-disclosure Agreement before viewing any risk assessment.
c. If you have not done a risk assessment, when are you planning on doing one?
D61 DEV PMO
Will your web site and/or web application conform to the accessibility requirements of the Web Content Accessibility Guidelines 2.0? If not discuss what steps you take to make your web site and/or web application accessible. The guidelines can be found at http://www.w3.org/TR/WCAG20/.
Section: Software Development - Applicable to All Proposals
The following questions pertain to the tools and third-party components used to develop your product.
Response
# BIT Question YES NO NA Explain answer as needed
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E1 DEV PMO x
What is the development technologies used for this system? Please indicate version as appropriate
ASP.Net VB.Net C#.Net .NET Framework Java/JSP MS SQL
E2 DAT TEL
Is this a browser based User Interface?
E3 DEV PMO
Will the system have any workflow requirements?
E4 DAT Can the system be implemented via Citrix? E5 DAT Will the system print to a Citrix compatible networked printer? E6 TEL If your application does not run under the latest Microsoft operating
system, what is your process for updating the application?
E7 DEV Identify each of the Data, Business and Presentation layer technologies your product would use and provide a roadmap outlining how your release and or update roadmap aligns with the release and or update roadmap for this technology.
E8 TELx Will your system use Adobe Air, Adobe Flash, Adobe ColdFusion, Apache Flex, JavaFX, Microsoft Silverlight, PHP or QuickTime? If yes, explain?
E9 DEV In order to connect to other applications or data, will the State be required to develop custom interfaces?
E10 DEV In order to fulfill the scope of work, will the State be required to develop reports or data extractions from the database? Will you provide any APIs that the State can use?
E11 DEV PMO
Has your company ever integrated this product with an enterprise service bus to exchange data between diverse computing platforms?
E12 DAT If the product is hosted at the State, will there be any third-party application(s) or system(s) installed or embedded to support the product (for example, database software, run libraries)? If so, please list those third-party application(s) or system(s).
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E13 DEV What coding and/or API standards are used during development of the software?
E14 DEV Does the software use closed-source Application Programming Interfaces (APIs) that have undocumented functions?
E15 DEV How does the software’s exception handling mechanism prevent faults from leaving the software, its resources, and its data (in memory and on disk) in a vulnerable state?
E16 DEV Does the exception-handling mechanism provide more than one option for responding to a fault? If so, can the exception handling options be configured by the administrator or overridden?
E17 DEV What percentage of code coverage does your testing provide?
E18 DAT A) Will the system infrastructure involve the use of email? B) Will the system infrastructure require an interface into the State’s
email infrastructure?
C) Will the system involve the use of bulk email distribution to State users? Client users? In what quantity will emails be sent, and how frequently?
E19 TEL x
A) Does your application use Java?
B) If yes, is it locked into a certain version? C) Will it use the latest version of Java? D) If so, what is your process for updating the application?
E20 DAT Explain how and where the software validates (e.g., filter with white listing) inputs from untrusted sources before being used.
E21 TEL Has the software been designed to execute within a constrained execution environment (e.g., virtual machine, sandbox, chroot jail, single-purpose pseudo-user)? Is it designed to isolate and minimize the extent of damage possible by a successful attack?
E22 TEL Does the program use run-time infrastructure defenses (such as address space randomization, stack overflow protection, preventing execution from data memory, and taint checking)?
E23 DEV Do you use open source software or libraries? If yes, do you check for vulnerabilities in your software or library that are listed in:
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a. Common Vulnerabilities and Exposures (CVE) database? b. Open Source Vulnerability Database (OSVDB)? c. Open Web Application Security Project (OWASP) Top Ten?
Section: Infrastructure - Applicability to all systems
This pertains to how your system interacts with the State's technology infrastructure.
Response
# BIT Question YES NO NA Explain answer as needed F1 TEL Is there a workstation install requirement? F2 DAT Will the system infrastructure have a special backup requirement? F3 DAT Will the system infrastructure have any processes that require
scheduling?
F4 DAT The State expects to be able to move your product without cost for Disaster Recovery purposes and to maintain high availability. Will this be an issue?
F5 TEL x
Will the network communications meet Institute of Electrical and Electronics Engineers (IEEE) standard TCP/IP (IPv4, IPv6) and use either standard ports or State-defined ports as the State determines?
F6 DAT x
It is State policy that all systems must be compatible with BIT’s dynamic IP addressing solution (DHCP). Would this affect the implementation of the system?
F7 TEL x
It is State policy that all software must be able to use either standard Internet Protocol ports or Ports as defined by the State of South Dakota BIT Network Technologies. Would this affect the implementation of the system? If yes, explain.
F8 DAT It is State policy that all HTTP/SSL communication must be able to be run behind State of South Dakota content switches and SSL accelerators for load balancing and off-loading of SSL encryption. If need is determined by the State, would this affect the implementation of the system? If yes, explain.
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F9 DAT x
The State has a virtualize first policy that requires all new systems to be configured as virtual machines. Would this affect the implementation of the system? If yes, explain.
F10 TEL x
It is State policy that all access from outside of the State of South Dakota’s private network will be limited to set ports as defined by the State and all traffic leaving or entering the State network will be monitored. Would this affect the implementation of the system? If yes, explain.
F11 TEL It is State policy that systems must support NAT and PAT running inside the State Network. Would this affect the implementation of the system? If yes, explain.
F12 TEL x
It is State policy that systems must not use dynamic TCP or UDP ports unless the system is a well-known one that is state firewall supported (FTP, TELNET, HTTP, SSH, etc.). Would this affect the implementation of the system? If yes, explain.
F13 DAT The State of South Dakota currently schedules routine maintenance from 0400 to 0700 on Tuesday mornings for our non-mainframe environments and once a month from 0500 to 1200 for our mainframe environment. Systems will be offline during this scheduled maintenance time periods. Will this have a detrimental effect to the system?
F14 DEV PMO
Does your product run on Citrix Metaframe?
F15 PMO TEL
Please describe the types and levels of network access your system/application will require. This should include, but not be limited to: TCP/UDP ports used, protocols used, source and destination networks, traffic flow directions, who initiates traffic flow, whether connections are encrypted or not, and types of encryption used. Vendor should specify what access requirements are for user access to the system and what requirements are for any system level processes. Vendor should describe all requirements in details and provide full documentation as to the necessity of the requested access.
F16 PMO x
List any hardware or software you propose to use that is not State standard, the standards can be found at http://bit.sd.gov/standards/.
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F17 DAT If your application is hosted on the State’s infrastructure, will it require a dedicated environment?
F18 DEV PMO
Will the system provide an archival solution? If not, is the State expected to develop a customized archival solution?
F19 DAT Who configures and deploys the servers? Are the configuration procedures available for review, including documentation for all registry settings?
F20 DAT What are your policies and procedures for hardening servers? F21 DAT
TEL Explain or provide a diagram of the architecture for the application including security mitigation.
F22 TEL x
What is your process for ensuring default remote login protocols and default passwords are disabled on Internet of Things ( IoT) devices that are connected to your system either permanently or intermittently?
F23 DAT Can the system be integrated with our enterprise Active Directory to ensure access is controlled?
F24 TEL x
It is State policy that no equipment can be connected to State Network without direct approval of BIT Network Technologies. Would this affect the implementation of the system?
F25 DAT x
Will the server-based software support: a. Windows server 2012 R2
b. IIS7.0 or higher c. MS SQL Server 2008R2 or higher d. Exchange 2010 or higher e. Citrix presentation server 4.5 or higher f. VMWare ESXi 5.5 or higher g. MS Windows Updates h. Symantec End Point Protection
F26 TEL x
All network systems must operate within the current configurations of the State of South Dakota’s firewalls, switches, IDS/IPS and desktop security infrastructure. Would this affect the implementation of the system?
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F27 DAT It is State policy that all systems that require an email interface must leverage existing SMTP processes currently managed by BIT Datacenter. Mail Marshal is the existing product used for SMTP relay. Would this affect the implementation of the system?
F28 DAT TEL
The State implements enterprise-wide anti-virus solutions on all servers and workstations as well as controls the roll-outs of any and all Microsoft patches based on level of criticality. Do you have any concerns in regards to this process?
F29 DAT TEL
What physical access do you require to work on hardware?
Section: Business Process - Applicability to all proposals
These questions relate to how your business model interacts with the State of South Dakota.
Response
# BIT Question YES NO NA Explain answer as needed G1 DAT If your application is hosted on a dedicated environment within the
State’s infrastructure, are all costs for your software licenses in addition to third-party software (i.e. MS-SQL, MS Office, and Oracle) included in your cost proposal?
If so, will you provide copies of the licenses with a line-item list of their proposed costs before they are finalized?
G2 PMO Explain the software licensing model.
G3 DAT DEV PMO
Is on-site assistance available? If so, is there a charge?
G4 DEV PMO
Will you provide customization of the system if required by the State of South Dakota?
If yes, are there any additional costs for the customization? G5 PMO Will the source code for the system be put in escrow for the State of
South Dakota? If yes, will you pay the associated escrow fees?
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G6 PMO Explain the basis on which pricing could change for the State based on your licensing model.
G7 PMO Contractually, how many years price lock are you offering the State as part of your response? Also as part of your response, how many additional years are you offering to limit price increases and by what percent?
G8 PMO Will the State of South Dakota own the data created in your hosting environment?
G9 PMO Will the State acquire the data at contract conclusion?
G10 PMO Will the State’s data be used for any other purposes other than South Dakota’s usage?
G11 DAT Has your company ever filed for Bankruptcy under U.S. Code Chapter 11? If so, please provide dates for each filing and describe the outcome.
G12 DAT Has civil legal action ever been filed against your company for delivering or failing to correct defective software? Explain.
G13 DAT Please summarize your company’s history of ownership, acquisitions, and mergers (both those performed by your company and those to which your company was subjected).
G14 DAT Will you provide on-site support 24x7 to resolve security incidents? G15 DEV What training programs, if any, are available or provided through
the supplier for the software? Do you offer certification programs for software integrators? Do you offer training materials, books, computer-based training, online educational forums, or sponsor conferences related to the software?
G16 DAT TEL
Are help desk or support center personnel internal company resources or are these services outsourced to third parties?
G17 DAT Are any of the services you plan to use located offshore (examples include data hosting, data processing, help desk and transcription services)?
G18 DAT Is the controlling share (51%+) of your company owned by one or more non-U.S. entities?
G19 DAT What are your customer confidentiality policies? How are they enforced?
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G20 DAT Are you ISO 27001 certified? Is the certification done annually? Will you provide a copy of your certification report?
G21 DAT (Use if PHI is involved) Are you HITRUST certified? Is the certification done annually? Will you provide a copy of your assessment?
G22 DAT PMO x
Will this application now or possibly in the future share PHI with other entities on other networks, be sold to another party or be accessed by anyone outside the US?
G23 DAT If the product is hosted at the State, will there be a request to include an application to monitor license compliance?
G24 DAT PMO
Is telephone assistance available for both installation and use? If yes, are there any additional charges?
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Appendix K: Information Technology Security Policy and Acknowledgement
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Appendix K
The South Dakota Bureau of Information and Technology’s Security Policy and a
Security Acknowledgement document are attached to this RFP as separate PDF’s and are
available on the RFP webpage: http://lottery.sd.gov/about/rfp/1160.aspx. The apparent successful
Vendor shall be required to abide by this policy and shall be required to sign the security
acknowledgement.
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Appendix L: Video Lottery Central System Reports
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Appendix L
The Video Lottery Central System shall include but not be limited to the list of reports
below. Additional mandatory or desired reports shall be determined through negotiations and
Business Requirements discussions.
SYSTEM REPORTS - Video Lottery
Transaction Report Lists VLT sale transactions and video game play
information for a specified date range.
Revenue/Game Level Analysis
Report
Lists VLT device level and game level financials with net
differences for a specified date range.
Event Logs Report Lists all events for a VLT, TC or RT for a specified date
range.
Non-Reporting Terminal Report Lists VLTs that did not respond successfully during the
latest poll.
VLT Movement Report Tracks movement of VLTs between establishments and
operators.
ROM Signature Report Lists ROM signature calculation failures.
Operator Listing Report Provides list of operators.
Establishment Listing Report Provides list of establishments.
Device Listing Report (VLTs, TCs,
MCDs, Redemption Terminals)
Lists device, operator, and establishment information for
all devices.
Game Summary Report Summarizes game level information for a specified date
range.
Meters Anomalies Report Lists the meter fetches that failed data integrity
verifications.
Soft Meter Adjustments Report Provides details for meter adjustments made at the device
and game level.
Raw Meters Listing Report Provides raw meters for VLT for specified date range.
Operator Billing Statements Provides invoice details for each operator for a given
billing period.
Billing Statement Summary Report Provides basic invoice information for a selected billing
period.
EFT Report Summarizes the EFT sweep details and operator
information for a given billing period.
EFT Non-Swept Report Provides listing of non-swept operators for a given billing
period.
License Billing Report Provides license billing invoice for each operator with
VLTs licensed during a billing period.
Manual Adjustments Report Lists manual accounting adjustments for a specified date
range.
Operator Billing Statements Provides invoice details for each operator for a given
billing period.