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Similarities and Differences between Managing Simple and Complex Contracts

Similarities and Differences between Managing Simple and Complex Contracts. Presented by Angela Zgabay -Zgarba and Andy Marker Texas Lottery Commission. Agency Overview. Operate Lottery and Regulate Bingo Unaudited Sales FY 2012 $4,190,815,913

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Similarities and Differences between Managing Simple and Complex Contracts

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  1. Similarities and Differencesbetween Managing Simple and Complex Contracts Presented by Angela Zgabay-Zgarba and Andy Marker Texas Lottery Commission

  2. Agency Overview • Operate Lottery and Regulate Bingo • Unaudited Sales FY 2012 $4,190,815,913 • Unaudited Transfers to State FY 2012 $1,153,560,513 • 317 FTE’s

  3. Contracts Administration • 2 Contract Administrators • 2 Attorneys who focus on Contracts • 3 Purchasers • 1 HUB Coordinator • 1 Director & 2 Managers • Contract Sponsors

  4. TLC Contracts • 75 -100 Active Contracts • Prime (15) • High Risk (11) • Other • Lease • Interagency • 60 Annual Promotional Event Contracts

  5. Statutes & Rules • Texas Gov’t Code • §466.014 • §466.101 • §466.102 • §466.103 • §466.105 • Texas Administrative Code • §401.101 - 104

  6. Procedures • 36 for Purchasing/Contracts/HUB • 19 govern Contracts Administration • 3 specific to Lottery Operator Contract • Vendor Background Risk Assessment • Needs & Risk Assessment

  7. Risk Assessment • Solicitation Document • Statutes & Rules • Procedures • Security and Integrity of Lottery Games • Conflicts of Interest • Background Investigations

  8. Contract Management • Monthly Disclosure of Litigation • Bonds and Insurance • Contract Sponsor reported issues • Annual Contract Compliance meetings with Contract Sponsors • Communication and Correspondence with Contractors • Contract Amendments • SOW’s or Change Orders

  9. Sanctions & Liquidated Damages • Liquidated Damages in most of our Contracts • Sanctions are in many of our Contracts • Compel Contractor Performance • Provide Remedies • Sanction, LD & Warning Letters

  10. Lottery Operator Contract • $1 Billion over life - $85M+ per year • Over 1,000 deliverables • Change orders • Contract compliance vendor • Approximately 70 Sanctions • Approximately 10 LD’s

  11. Advertising Contract • $32 M per year • Advertising & Media Planning • Reporting • Billing and invoicing • Staffing

  12. Instant Ticket Manufacturers • 3 Contractors • $19.5 M per year • Approximately 75% of agency sales are instant tickets • 85-90 instant games printed each year

  13. Simple vs. Complex • Complex • Bonds and Insurance Required • Long Contract Term • Significant Risk Associated • In-depth Background Investigations • Many Sanctions or Liquidated Damages • Extensive Terms & Conditions • Simple • No Bonds or Insurance • Short Contract Term • Limited Risk Associated • Background Certification • Few Sanctions or Liquidated Damages • Minimal Terms & Conditions

  14. Questions?

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