2005 California Government Code Sections 8880.56-8880.60 Article 6. Lottery Suppliers

8880.56.  (a) Notwithstanding other provisions of law, the director
may purchase or lease goods and services as are necessary for
effectuating the purposes of this chapter.  The director may not
contract with any private party for the operation and administration
of the California State Lottery, created by this chapter.  However,
this section does not preclude procurements which integrate functions
such as game design, supply, advertising, and public relations.  In
all procurement decisions, the director shall, subject to the
approval of the commission, award contracts to the responsible
supplier submitting the lowest and best proposal that maximizes the
benefits to the state in relation to the areas of security,
competence, experience, and timely performance, shall take into
account the particularly sensitive nature of the California State
Lottery and shall act to promote and ensure integrity, security,
honesty, and fairness in the operation and administration of the
lottery and the objective of raising net revenues for the benefit of
the public purpose described in this chapter.
   (b) Notwithstanding any other provision of this chapter, the
following shall apply to contracts or procurement by the lottery:
   (1) To ensure the fullest competition, the commission shall adopt
and publish competitive bidding procedures for the award of any
procurement  or contract involving an expenditure of more than one
hundred thousand dollars ($100,000).  The competitive bidding
procedures shall include, but not be limited to, requirements for
submission of bids and accompanying documentation, guidelines for the
use of requests for proposals, invitations to bid, or other methods
of bidding, and a bid protest procedure.  The director shall
determine whether the goods or services subject to this paragraph are
available through existing contracts or price schedules of the
Department of General Services.
   (2) The contracting standards, procedures, and rules contained in
this subdivision shall also apply with respect to any subcontract
involving an expenditure of more than one hundred thousand dollars
($100,000).  The commission shall establish, as part of its bidding
procedures for general contracts, subcontracting guidelines that
implement this requirement.
   (3) The provisions of Article 1 (commencing with Section 11250) of
Chapter 3 of Part 1 of Division 3 apply to the commission.
   (4) The commission is subject to the Small Business Procurement
and Contract Act, as provided in Chapter 6.5 (commencing with Section
14835) of Part 5.5 of Division 3.
   (5) In advertising or awarding any general contract for the
procurement of goods and services exceeding five hundred thousand
dollars ($500,000), the commission and the director shall require all
bidders or contractors, or both, to include specific plans or
arrangements to utilize subcontracts with socially and economically
disadvantaged small business concerns.  The subcontracting plans
shall delineate the nature and extent of the services to be utilized,
and those concerns or individuals identified for subcontracting if
known.
   It is the intention of the Legislature in enacting this section to
establish as an objective of the utmost importance the advancement
of business opportunities for these small business concerns in the
private business activities created by the California State Lottery.
In that regard, the commission and the director shall have an
affirmative duty to achieve the most feasible and practicable level
of participation by socially and economically disadvantaged small
business concerns in its procurement programs.
   By July 1, 1986, the commission shall adopt proposal evaluation
procedures, criteria, and contract terms which are consistent with
the advancement of business opportunities for small business concerns
in the private business activities created by the California State
Lottery and which will achieve the most feasible and practicable
level of participation by socially and economically disadvantaged
small business concerns in its procurement programs.  The proposal
evaluation procedures, criteria, and contract terms adopted shall be
reported in writing to both houses of the Legislature on or before
July 1, 1986.
   For the purposes of this section, socially and economically
disadvantaged persons include women, Black Americans, Hispanic
Americans, Native Americans (including American Indians, Eskimos,
Aleuts, and Native Hawaiians), Asian-Pacific Americans (including
persons whose origins are from Japan, China, the Philippines,
Vietnam, Korea, Samoa, Guam, the United States Trust Territories of
the Pacific, Northern Marianas, Laos, Cambodia, and Taiwan), and
other minorities or any other natural persons found by the commission
to be disadvantaged.
   The commission shall report to the Legislature by July 1, 1987,
and by each July 1 thereafter, on the level of participation of small
businesses, socially and economically disadvantaged businesses, and
California businesses in all contracts awarded by the commission.
   (6) The commission shall prepare and submit to the Legislature by
October 1 of each year a report detailing the lottery's purchase of
goods and services through the Department of General Services.  The
report shall also include a listing of contracts awarded for more
than one hundred thousand dollars ($100,000), the name of the
contractor, amount and term of the contract, and the basis upon which
the contract was awarded.
   The lottery shall fully comply with the requirements of paragraphs
(2) to (5), inclusive, except that any function or role which is
otherwise the responsibility of the Department of Finance or the
Department of General Services shall instead, for purposes of this
subdivision, be the sole responsibility of the lottery, which shall
have the sole authority to perform that function or role.
8880.57.  In  order to allow an evaluation of the competence,
integrity, and character of potential Lottery Contractors for the
California State Lottery, any person, corporation, trust,
association, partnership, or joint venture that submits a bid,
proposal, or offer as part of procurement for a contract for any
goods or services for the California State Lottery, other than
materials, supplies, services, and equipment which are common to the
ordinary operations of state agencies, shall comply with each of the
following:
   (a) Bidders, as required by the Lottery, shall disclose the bidder'
s name and address and, as applicable, the name and address of the
following:
   (1) If the bidder is a corporation, the officers, directors, and
each owner, directly or indirectly, of any equity security or other
ownership interest in the corporation.  However, in the case of
owners of publicly held equity securities of a publicly traded
corporation, only the names and addresses of those known to the
corporation to beneficially own 5 percent or more of the publicly
held securities need be disclosed.
   (2) If the bidder is a trust, the trustee and all persons entitled
to receive income or benefit from the trust.
   (3) If the bidder is an association, the members, officers, and
directors.
   (4) If the bidder is a subsidiary, the officers, directors, and
stockholders of the parent company thereof.  However, in the case of
owners of publicly held equity securities of a publicly traded
corporation, only the names and addresses of those known to the
corporation to beneficially own 5 percent or more of the publicly
held securities need be disclosed.
   (5) If the bidder is a partnership or joint venture, all of the
general partners, limited partners, or joint venturers.
   (6) If the parent company, general partner, limited partner, or
joint venturer of any bidder is itself a corporation, trust,
association, subsidiary, partnership, or joint venture, then the
disclosure of information needed to determine ultimate ownership.
However, in the case of owners of publicly held equity securities of
a publicly traded corporation, only the names and addresses of those
known to the corporation to beneficially own 5 percent or more of the
publicly held securities need be disclosed.
   (7) If the bidder proposes to subcontract any substantial portion
of the work to be performed to a subcontractor, then all of the
information required in this section shall be disclosed for the
subcontractor as if it were itself a bidder.
   (b) After receipt of a bid, proposal, or offer, but prior to the
award of a contract, the Commission may require a potential Lottery
Contractor to provide any or all of the following information:
   (1) A disclosure of all the states and jurisdictions in which the
bidder does business, and the nature of that business for each state
or jurisdiction.
   (2) A disclosure of all the states and jurisdictions in which the
bidder has contracts to supply gaming goods or services, including,
but not limited to, lottery goods and services, and the nature of the
goods or services involved for each state or jurisdiction.
   (3) A disclosure of all the states and jurisdictions in which the
bidder has applied for, has sought renewal of, has received, has been
denied, has pending, or has had revoked a gaming license of any
kind, and the disposition in each state or jurisdiction.  If any
gaming license has not been renewed or any gaming license application
has been either denied or has remained pending for more than six
months, all of the facts and circumstances underlying this failure to
receive a gaming license shall be disclosed.
   (4) A disclosure of the details of any conviction or judgment of a
state or federal court against the bidder of any gambling-related
offense, or criminal offense other than traffic violations.
   (5) A disclosure of the details of any bankruptcy, insolvency, or
reorganization, or any judgment or pending litigation involving fraud
or deceit against the bidder.
   (6) A disclosure for each bidder of the employment, residence,
educational, and military history since the age of 18 years of any of
its owners, directors, members, officers, employees, or agents
identified by the Lottery.
   (7) A disclosure consolidating all reportable information on all
reportable contributions by the bidder to any local, state, or
federal political candidate or political committee in this state for
the past five years that is reportable under any existing state or
federal law.
   (8) A disclosure of the identity of any entity with which the
bidder has a joint venture or other contractual arrangement to supply
any state or jurisdiction with gaming goods or services, including,
but not limited to, lottery goods or services; including a disclosure
with regard to the entity of all of the information requested under
paragraphs (1) to (8), inclusive.
   (9) In the instance of a procurement for the printing of lottery
tickets, for goods or services involving the receiving or recording
of number selections, or for goods or services involving the
determination of winners, an additional disclosure consisting of the
individual federal and state income tax returns for the past three
years and a current individual financial statement for each bidder
and any of the bidder's owners, directors, members, officers,
employees, or agents identified by the Lottery.  The disclosures
provided in this paragraph shall be considered confidential and shall
be transmitted directly to the Deputy Director for Security and the
Attorney General for their review.
   (10) Any additional disclosures and information as may be
appropriate for the procurement involved as determined by the
Commission.
   (c) With respect to the persons or entities described in
paragraphs (1) to (7), inclusive, of subdivision (a), the Commission
may request the disclosure of any information required in subdivision
(b), which shall be relevant to the award of any contract.
   (d) No contract with any bidder who has not complied with the
disclosure requirements described in this section shall be entered
into or be enforceable.  Any contract with any  lottery contractor
who does not comply with these requirements for maintaining the
currency of the disclosures during the term of the contract as may be
specified in the contract may be terminated by the Commission.  In
addition, the Commission may deny or cancel a contract with a
lottery contractor or any of the persons or entities included in
paragraphs (1) to (7), inclusive, of subdivision (a) if any of the
following apply:
   (1) False statements have been made in any information which is
required under this section.
   (2) Any of the persons or entities have been convicted of a crime
punishable as a felony.
   (3) Any of the persons or entities have been convicted of an
offense involving dishonesty or any gambling-related offense.
   (e) This section shall be construed broadly and liberally to
achieve the end of full disclosure of all information necessary to
allow for a full and complete evaluation of the competence,
integrity, and character of potential suppliers of the California
State Lottery Commission.
8880.58.  Compliance with Applicable Laws
   Each Lottery Contractor shall perform its contract consistent with
the laws of this State, Federal law, and laws of the state or states
in which such supplier is performing or producing, in whole or in
part, any of the goods or services contracted for hereunder.
8880.59.  Performance Bond
   Any Lottery Contractor may be required by the Lottery to post,
with the Commission an acceptable performance bond, letter of credit,
or other form of security or guarantee of performance, using a
surety acceptable to the Commission, in an amount sufficient to
protect the Lottery in case of default by the contractor. The
Commission may require any Lottery Game Retailer to provide a
fidelity bond which shall be payable upon order of the Commission.
8880.60.  No member of the commission shall, for a two-year period
after the end of the member's term, accept any consideration from,
whether directly or indirectly, and shall not accept any employment
with, whether as an employee, independent contractor, or consultant,
any lottery contractor successful in a major procurement whose
contract award was subject to formal approval by the commission.  No
director shall accept any consideration from, whether directly or
indirectly, and shall not accept any employment with, whether as an
employee, independent contractor, or consultant, any lottery
contractor successful in a major procurement for a period of two
years commencing on the last day that the director is employed by the
lottery.  No other lottery employee involved in the evaluation of or
recommendation to award a major procurement shall accept any
consideration from, or employment with, any lottery contractor
successful in that procurement for a period of one year commencing on
the last day that the person is employed by the lottery.  In the
event that the director, any member of the commission, or other
lottery employee violates this subdivision, the  commission may
terminate the contract between the lottery and the lottery contractor
for the major procurement.  The Attorney General shall investigate
the facts surrounding the violation and shall recommend to the
commission any appropriate civil remedies which the  lottery has
against the lottery contractor, member of the commission, director,
or other lottery employee due to the violation, including, but not
limited to, action to terminate the lottery contractor's contract
where appropriate.
   For purposes of this subdivision, "major procurement" means any
procurement of materials, supplies, services, or equipment other than
those common to the ordinary operations of state agencies.
   The prohibitions imposed by this section shall not apply to any
person who left government service prior to September 28, 1987,
except that a person who returns to government service on or after
that date shall thereafter be covered thereby.