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. Statutory/Other Authority: OR Const., Art. XV, §4(4) & ORS 461 Statutes/Other Implemented: ORS 461.400, 461.410, 461.420, 461.430 & 461.440 History: LOTT 17-2005, f. 12-21-05, cert. ef. 12-31-05 LOTT 13-2005(Temp), f. & cert. ef. 11-3-05 thru 4-30-06