Columbia Gaming Services Inc., which finished last in the three-way race for the lucrative contract to operate Washington's planned daily numbers game, has protested the decision with the D.C. lottery board, claiming that the winning firm does not meet two of the board's key requirements to run the game.
Columbia Gaming, whose proposed financial cost to operate the game was twice that of the winner, Lottery Technology Enterprises, said that Lottery Technology did not meet the board's required minority participation level and that its financial bid was so low that it will lose money and be unable to fulfill its contractual obligations.
Board chairman Brant Coopersmith said the protest is being reviewed by the board's attorneys, but he said he he did not think it would delay the expected signing of the contract with Lottery Technology by the end of this month. The board has no specific procedures for hearing a protest by a losing bidder, so it is unclear exactly how the panel will respond to Columbia Gaming.
"I will do everything I can do to avoid a delay," Coopersmith said, noting that any postponement of the expected late July start for the daily numbers game could cost the city government some of the $26 million it is counting on from lottery revenues in the current fiscal year.
After considering the bids for nearly two months, the board voted last week to award the contract to Lottery Technology, a joint venture of a Rhode Island computer firm, Gaming Systems Corp., and four relatively unknown minority-owned Washington companies.
In selecting Lottery Technology, the board bypassed two more politically potent bidders--Columbia Gaming, which is represented by Robert B. Washington Jr., a prominent D.C. attorney and former city Democratic Party chairman; and D.C. Data Co., one of whose investors is William B. Fitzgerald, president of Independence Federal Savings and Loan Association and a confidant of D.C. Mayor Marion Barry.
Lottery Technology's winning proposal calls for 60 percent equity for the four minority-owned companies. Under a complex formula, the firm would be paid 3.9235 percent of the first $2 million in lottery revenues each week and 2.95 percent of the next $2 million, the basic bid on which the proposals were judged.
D.C. Data submitted the lowest basic bid, 2.5 percent, and said its proposal also has 60 percent minority participation. Columbia Gaming's basic bid was 5.9 percent with 85 percent minority participation.
In its protest to the board, filed last Friday, Columbia Gaming's lawyers, Washington and James M. Christian, alleged that it is unclear under both the Lottery Technology and D.C. Data proposals how much money actually would go to the minority partners. As a result, the lawyers claimed that the two firms would not meet the city's requirement for 25 percent minority participation.
In addition, Columbia Gaming claimed that Lottery Technology's bid was so low that will "incur a substantial loss on this contract . . . and that it will be unable to perform the contract."
Columbia Gaming said that because of the alleged faults with the Lottery Technology and D.C. Data bids, the board's decision should be overturned and the contract awarded to Columbia Gaming.