D.C. Mayor Marion Barry, faced with a court order blocking the signing of a contract to operate the city's first legal daily numbers game, suggested yesterday to the D.C. lottery board that it reopen bidding among the three companies seeking the lucrative pact, according to two sources who attended the meeting.
The lottery board did not immediately agree to do that, but one of the sources said after the 90-minute meeting in Barry's office that there is a "very, very good possibility that will happen."
Barry said later that he did not ask the lottery agency to reconsider the bids. "We were just reviewing where we were legally" after a D.C. Superior Court judge ordered the board Monday not to sign the contract until the matter could be considered further, Barry said. He said he urged the board "to get with the corporation counsel and work out strategy."
Last Sunday, the five-member lottery board rejected the advice of D.C. Corporation Counsel Judith W. Rogers that the three companies be given another chance to improve on their so-called "best and final offers." She gave them that advice after a city contract review committee found that the board had erred in not fully considering the minority participation levels being proposed by the three bidders.
The contract review committee urged the board to reconsider the matter, but the board voted 3 to 1, with one abstention, to stand firm in its selection of Lottery Technology Enterprises, a joint venture of a Rhode Island-based computer company and four minority-controlled companies from the District.
On Monday, D.C. Superior Court Judge Eugene N. Hamilton, acting at the request of the two losing bidders, issued a temporary restraining order prohibiting the board from signing the contract pending the outcome of a hearing on the matter set for next Thursday.
The board, after rejecting the advice to reconsider the bids, then hired an attorney from the prestigious law firm of Arnold & Porter to assist the agency's general counsel, Jeanette Michael, in defending the choice of Lottery Technology.
Barry said after the meeting that there has been "miscommunication" between the lottery board and Rogers' office. But, he said, "I got the impression they're going to use the corporation counsel" to represent the agency.
One of the sources who attended the meeting confirmed that, saying: "It's a matter of time until we terminate our arrangement with Arnold & Porter."
Yesterday's meeting was the latest chapter in the four-month fight over the contract, which may be worth $4 million or more annually to the winning firm, based on anticipated wagering of $100 million.
The dispute over who gets the contract has grown more contentious in the last week, as the board sought to sign the contract with Lottery Technology and the two losing bidders fought to wrest it away. Lawyers for the competing firms are even disputing between themselves about who should be required to give testimony about how Lottery Technology was selected.
The two losing firms are Columbia Gaming Services Inc., a company that includes Control Data Corp. and local minority investors, and D.C. Data Co., whose main computer firm is a division of General Instrument Corp.
Both of the losing firms have more local political clout than Lottery Technology, whose minority firms are relatively unknown.
Columbia is represented by Robert B. Washington Jr., a former city Democratic chairman, while one of D.C. Data's investors is William B. Fitzgerald, president of Independence Federal Savings and Loan Association and a confidant of Barry.
"I have not advocated one firm or another," Barry said yesterday. He said it is "irrelevant what I think" about the choice of Lottery Technology.
One of the sources who attended the meeting quoted him as saying, "It's the only fair thing to do," to reopen the bids. To do so, the other source said, would be to create "an auction," since all three firms now know what the others have bid.
Several sources familiar with the selection process have said that Deputy Mayor Ivanhoe Donaldson, who has questioned whether Lottery Technology and D.C. Data have true minority representation in ownership, has played an active role in urging consideration for Columbia Gaming, the highest bidder among the three.
D.C. law requires that the winning firm have at least 25 percent minority representation. Columbia Gaming has promised 85 percent, while the other two have pledged 60 percent.
Donaldson, according to the sources, berated Michael last week for refusing to accept the recommendation to reconsider the bids.
Barry denied that Donaldson has played such a role and Donaldson could not be reached for comment.