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The Oregon Administrative Rules contain OARs filed through July 15, 2014
 
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OREGON STATE LOTTERY

 

DIVISION 37

LOTTERY VENDOR DISCLOSURE RULES

 

177-037-0000

Definitions

The definitions in OAR 177-036-0000 apply to the terms used in this division. In addition, the following definitions apply:

(1) "Control Person" means a person described in ORS 461.410.

(2) "General Procurement" means a procurement for those Goods or Services that do not involve sensitive or secure Lottery information, and includes, but is not limited to, office supplies and equipment, media, vehicles, and promotional products. Disclosure requirements governing this classification are contained in OAR 177-037-0050.

(3) "Major Procurement" has that definition as defined in OAR 177-036-0000(19).

(4) "Sensitive Procurement" means a procurement that involves sensitive and secure information and includes, but is not limited to, Goods or Services involving audits for drawings and security, direct access to gaming computer systems, financial systems, receiving or recording of gaming information, locks and keys for terminals, and also includes the Lottery's primary advertising agency. Disclosure requirements for this classification of procurements are contained in ORS 461.700 and OAR 177-037-0040.

(5) "Vendor" means, for the purposes of this chapter, any Person interested in providing Goods or Services to the Lottery, but does not include a Lottery game retailer as defined in ORS 461.010(7).

Stat. Auth.: OR Const., Art. XV, ¦4(4) & ORS 461
Stats. Implemented: ORS 461.400, 461.410, 461.420, 461.430 & 461.440
Hist.: LOTT 13-2005(Temp), f. & cert. ef. 11-3-05 thru 4-30-06; LOTT 17-2005, f. 12-21-05, cert. ef. 12-31-05

177-037-0010

General Policy

(1) General: It is the policy of the Lottery to conduct security background investigations on Lottery Vendors and Lottery Contractors to ensure the competence, integrity, background, good character, and the nature of the true business ownership and control of a Vendor or Contractor.

(2) Disclosure: To assure the security and integrity of the Lottery and Lottery games, the Director may require a Vendor, including any Control Person of the Vendor, or any employee or subcontractor of the Vendor that Lottery determines may have access to sensitive or secure Lottery information, to disclose and provide any information or disclosures deemed necessary to approve the Vendor as a Lottery Contractor. When required by these rules or by the Director, the Vendor must submit an application for approval to be a Lottery Contractor on disclosure forms provided by Lottery and must include all information and disclosures requested.

Stat. Auth.: OR Const., Art. XV, ¦4(4) & ORS 461
Stats. Implemented: ORS 461.400, 461.410, 461.420, 461.430 & 461.440
Hist.: LOTT 13-2005(Temp), f. & cert. ef. 11-3-05 thru 4-30-06; LOTT 17-2005, f. 12-21-05, cert. ef. 12-31-05

177-037-0020

Classification of Lottery Procurements

(1) General: A procurement or Contract is classified according to the degree to which a Contractor may have access to secure and sensitive Lottery information, including materials or systems, which in the opinion of the Director affect the honesty, fairness, integrity, or security of the Lottery or any Lottery games. The factors used to classify a procurement or Contract include, but are not limited to: The type of Goods or Services to be provided; access to and the potential risk to Lottery games technology or data, access to and the potential risk to Lottery financial systems; and the type of company involved. There are three classifications of Procurements: Major, Sensitive, and General.

(2) Classification: The decision to classify a procurement as a Major, Sensitive, or General Procurement is made by the Director in consultation with the Assistant Director for Security prior to the Lottery's issuance of a Solicitation Document. The classification of a procurement, disclosure requirements, and instructions for disclosure will be stated in the procurement Solicitation Document or in the procurement advertisement.

(3) Classification Changes: The Director's decision to classify a particular procurement under sections (1) and (2) of this rule is not binding on the Lottery and in no way limits the authority of the Commission or the Director to change the procurement or Contract classification, or the disclosure requirements at any time prior to the award of a Contract or during the term of a Contract.

Stat. Auth.: OR Const., Art. XV, ¦4(4) & ORS 461
Stats. Implemented: ORS 461.400, 461.410, 461.420, 461.430 & 461.440
Hist.: LOTT 13-2005(Temp), f. & cert. ef. 11-3-05 thru 4-30-06; LOTT 17-2005, f. 12-21-05, cert. ef. 12-31-05

177-037-0030

Major Procurements

(1) General: In all solicitations for a Major Procurement, Lottery shall clearly identify the solicitation as a Major Procurement.

(2) Disclosure: All procurements classified as a Major Procurement require an extensive security background investigation and are subject to all disclosure requirements specified in ORS Chapter 461 and OAR chapter 177, division 37, and any other special disclosure requirements deemed necessary by the Director or the Commission. An Offer or Proposal for a Major Procurement must include an application for approval to be a Lottery Contractor, including all required information and disclosures, and must be on forms provided by the Lottery.

(3) Continuing Disclosure Requirement: Unless otherwise specified in the Contract for a Major Procurement, during the term of the Contract a Contractor must update any information or disclosures submitted in the application for approval to be a Lottery Contractor within thirty days of any change.

Stat. Auth.: OR Const., Art. XV, ¦4(4) & ORS 461
Stats. Implemented: ORS 461.400, 461.410, 461.420, 461.430 & 461.440
Hist.: LOTT 13-2005(Temp), f. & cert. ef. 11-3-05 thru 4-30-06; LOTT 17-2005, f. 12-21-05, cert. ef. 12-31-05

177-037-0040

Sensitive Procurements

(1) General: In all solicitations for a Sensitive Procurement, Lottery shall clearly identify the solicitation as a Sensitive Procurement

(2) Disclosure: All procurements classified as a Sensitive Procurement require a security background investigation and are subject to all disclosure requirements specified in OAR chapter 177, division 37 and the Solicitation Document, and any other special disclosure requirements deemed necessary by the Director or the Commission. An Offer or Proposal for a Sensitive Procurement must include an application for approval to be a Lottery Contractor, including all required information and disclosures, and must be on forms provided by the Lottery.

(3) Continuing Disclosure Requirement: Unless otherwise specified in the Contract for a Sensitive Procurement, during the term of the Contract a Contractor must update any information or disclosures submitted in the application for approval to be a Lottery Contractor within thirty days of any change.

Stat. Auth.: OR Const., Art. XV, ¦4(4) & ORS 461
Stats. Implemented: ORS 461.400, 461.410, 461.420, 461.430 & 461.440
Hist.: LOTT 13-2005(Temp), f. & cert. ef. 11-3-05 thru 4-30-06; LOTT 17-2005, f. 12-21-05, cert. ef. 12-31-05

177-037-0050

General Procurements

(1) General: In all solicitations for a General Procurement, Lottery shall clearly identify the solicitation as a General Procurement.

(2) Disclosure: A procurement classified as a General Procurement does not require a security background investigation, unless deemed necessary by the Director or the Commission.

(3) Continuing Disclosure Requirement: If a security background investigation is deemed necessary, the Solicitation Document shall include the instructions for disclosure. An Offer or Proposal must include an application for approval to be a Lottery Contractor, including all required information and disclosures, and must be on forms provided by the Lottery. Unless otherwise specified in the Contract, during the term of the Contract a Contractor must update any information or disclosures submitted in the application for approval to be a Lottery Contractor within thirty days of any change.

Stat. Auth.: OR Const., Art. XV, ¦4(4) & ORS 461
Stats. Implemented: ORS 461.400, 461.410, 461.420, 461.430 & 461.440
Hist.: LOTT 13-2005(Temp), f. & cert. ef. 11-3-05 thru 4-30-06; LOTT 17-2005, f. 12-21-05, cert. ef. 12-31-05

177-037-0060

Vendor Application and Contract Disclosure Requirements

(1) General: The Director may require any degree or type of disclosure deemed necessary to assure the security and integrity of the Lottery and Lottery games.

(2) Forms and Procedures: The Director shall approve all the forms and procedures to be used by all Vendors who wish to apply for approval to be a Lottery Contractor.

(3) Vendor Submission: A Vendor must complete the required application for approval to be a Lottery Contractor and provide any information and disclosures required, as determined by the Director and the Assistant Director of Security within the guidelines and timelines set forth in the Solicitation Document or as otherwise required by the Director and the Assistant Director for Security.

(4) Complete Disclosure Required: The Director may reject an application for approval to be a Lottery Contractor if the Vendor has not provided all the information and disclosures required to be submitted or if any of the information or disclosures submitted is not accurate, current, or truthful.

(5) Continuing Disclosure Requirement: If during the evaluation period for an Offer or Proposal there are any changes to the information or disclosures submitted, a Vendor must update the information as soon as possible. After the Award, a Vendor selected must immediately update any changes to the information or disclosures submitted.

(6) Status Changes: Unless other standards are established in a Contract, during the term of the Contract any changes in the status of the Contractor, the status of a Control Person, or any employee or subcontractor for which information or disclosures were submitted, or the addition of any other Control Person, or the addition of any employee or subcontractor who may have access to sensitive or secure Lottery information, must be reported to the Director within thirty days of the known change. Those whose status has changed or who have been added as a Control Person or added as an employee or subcontractor who the Lottery determines may have access to sensitive or secure Lottery information will be required to submit the required information and disclosures. If there has been no change in Vendor status or Control Persons, the Vendor is required to certify annually on their vendor Contract anniversary date that there has been no change.

(7) Burden of Proof: The burden of proof for satisfying the Lottery's disclosure requirements resides with the Vendor or Contractor.

(8) Vendor Consent: Each Vendor who submits an application for approval to be a Lottery Contractor must consent in writing to the examination of all accounts, bank accounts, and Vendor records under the Vendor's possession or control. If required by the Director, a Vendor must permit an inspection of any portion of the Vendor's business premises deemed necessary by the Lottery.

(9) Investigation Costs: As authorized under ORS 461.700(2), the Director may charge a Vendor an amount necessary to reimburse the Lottery for the costs associated with conducting the security background investigation if the Director determines the costs of the investigation exceed the usual costs of such investigation.

(10) Acceptance of Risk: Each Vendor or Contractor must accept any risk of adverse public notice, embarrassment, criticism, damages, or financial loss, including any publication or use by a third party, which may result from the disclosure or use by Lottery of any information or document submitted by the Vendor or Contractor. By submitting a Vendor application for approval to be a Lottery Contractor to the Lottery, the Vendor or Contractor expressly waives any claim against the State of Oregon, including the Lottery, the Director, the Commission, the Department of State Police, and their officers and employees for any and all damages resulting from the use or disclosure of any information or documents submitted to Lottery or from the use or disclosure of any information obtained by Lottery as a result of the security background investigation.

(11) Indemnification: By submitting an application for approval to be a Lottery Contractor to the Lottery, the Vendor or Contractor agrees to indemnify, defend, and hold harmless the State of Oregon, the Lottery Commission, the Lottery, the Department of State Police, their agents, officers, employees, and representatives, from and against all claims, suits, actions, losses, damages, liabilities, costs, and expenses arising out of, or relating to, the use or disclosure of any information or disclosures submitted in the application for approval to be a Lottery Contractor or from the use or disclosure of any information obtained by Lottery as a result of the security background investigation. The Vendor's or the Contractor's obligations include, but are not limited to, any and all losses, damages, liabilities, settlements, judgments, fines, costs, fees, and expenses of any nature whatsoever, including, but not limited to, attorneys and other professional fees at trial and on appeal.

(12) Chain of Custody: All required information and disclosures must be submitted in a secure manner and may only be opened for review by the Assistant Director for Security or his designee, or by the Director.

(13) Submission Constitutes Consent: By submitting an Offer or Proposal, a Vendor binds itself, its officers, employees, agents, and any subcontractors to comply with all disclosure requirements established by the Director. Failure or refusal to comply with any applicable requirement may result in denial or revocation of a Contract Award. In the event of denial or revocation of the Award due to refusal or failure to comply with any applicable disclosure requirement set forth in these rules, the Vendor is liable under the bid bond or shall forfeit any security posted for the procurement.

Stat. Auth.: OR Const., Art. XV, ¦4(4) & ORS 461
Stats. Implemented: ORS 461.400, 461.410, 461.420, 461.430 & 461.440
Hist.: LOTT 13-2005(Temp), f. & cert. ef. 11-3-05 thru 4-30-06; LOTT 17-2005, f. 12-21-05, cert. ef. 12-31-05

177-037-0070

Criteria for Denying a Vendor or Control Person Application or Contract

(1) General: Before a Contract for a Major or Sensitive Procurement is Awarded, a security background investigation must be conducted by the Assistant Director for Security for any Vendor who is selected to be Awarded the Contract. The Assistant Director for Security shall conduct any other security background investigation specified by the Director.

(2) Director's Determination: The Director may deny or revoke approval to be a Lottery Contractor to any Vendor or Contractor when a security background investigation determines:

(a) Business Qualifications: The Vendor or Contractor does not demonstrate, either individually or through its employees or Control Persons, that the business has the ability and experience to establish, operate, and maintain the business operations necessary to provide the Goods or Services required in the Solicitation Document or under the Contract, or to provide the security necessary to protect sensitive and secure Lottery information, materials, or systems.

(b) Financing: The Vendor or Contractor does not demonstrate adequate financing to be able to provide the Goods or Services as required for performance of the Contract.

(c) Integrity: The Vendor, a Control Person of the Vendor, or any employee or subcontractor of the Vendor the Lottery determines may have access to sensitive or secure Lottery information, materials or systems:

(A) Criminal Conviction: Has been convicted of any crime in any jurisdiction.

(B) Gambling Offense Conviction: Has been convicted of any gambling offense in any jurisdiction.

(C) Conduct Constituting a Crime: Has been imposed with a civil judgment based in whole or in part upon conduct which constitutes a crime.

(D) Material Omission: Has omitted any material fact that was to be disclosed to the Lottery or its authorized agents during an initial or subsequent security background investigation.

(E) Threat to the Public Interest: Is an individual or entity whose background, including criminal, civil, and financial records, or whose reputation, or whose personal or business associations, pose a threat to the public interest of the state or to the security and integrity of the Lottery.

(F) Character: Is not of good character, honesty, or integrity.

(G) Material Misstatement: Has provided a material misstatement or untrue statement of a fact deemed to be material by the Director.

(H) Other Conduct: Has engaged in conduct the Director determines may, in any way, adversely affect the integrity, security, honesty or fairness of the Lottery.

(I) Access: Refuses to provide access to records or to inspection of any part of the business premises deemed necessary by the Lottery.

(J) Association: Has an association with a person or business having a known criminal background, or a person the Lottery Director determines is of disreputable character or conduct, and which may adversely affect the general credibility, security, integrity, honesty, fairness or reputation of the Lottery.

(d) Ownership Interest: The Vendor is qualified to be approved as a Lottery Contractor, but there is an ownership interest in the Vendor's business operation by a Person who is unqualified or disqualified to be approved as a Lottery Contractor.

(e) Tax Violation: The Vendor is in violation of any tax laws described in ORS 305.380(4).

(3) Evaluation Factors: In evaluating whether to deny approval to be a Lottery Contractor to any Vendor or based on subsection (2) of this rule, the Director may consider the following factors:

(a) Nature and Severity: The nature and severity of the conduct, incident, or circumstance;

(b) Time: The passage of time;

(c) Intervening Factors: Any intervening circumstances;

(d) Multiple Offenses: The number of offenses, crimes, or incidents;

(e) Materiality and Relevancy: The materiality and relevancy to the work to be performed; or

(f) Extenuating Circumstances: Any extenuating circumstances that affect or reduce the impact of the conduct, incident, offense or crime on the security, integrity, honesty, and fairness of the Lottery.

(4) Director's Determination: The Director's decision to deny approval to be a Lottery Contractor is final.

(5) Revocation and Termination: The denial criteria described in this rule may also constitute sufficient grounds for revoking a Contractor's approval to be a Lottery Contractor and for the termination, immediate or otherwise, of an existing Contract.

Stat. Auth.: OR Const., Art. XV, ¦4(4) & ORS 461
Stats. Implemented: ORS 461.400, 461.410, 461.420, 461.430 & 461.440
Hist.: LOTT 13-2005(Temp), f. & cert. ef. 11-3-05 thru 4-30-06; LOTT 17-2005, f. 12-21-05, cert. ef. 12-31-05

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