ANNAPOLIS, FEB. 14 -- A company represented by top lobbyist Bruce C. Bereano and former governor Marvin Mandel won the recommendation today for the Maryland lottery's lucrative computer contract, ending a bare-knuckles competition marked by allegations of political misconduct.
After a nine-week review deemed objective and exhaustive by those involved, two specially appointed panels concluded that Rhode Island-based GTECH Corp. should take over the lottery's computer operations, now run by Control Data Corp.
Control Data has supplied and operated the Maryland lottery's computer system for a decade and was the only other bidder for the five-year contract. Although the review group rated the companies virtually equal on the technical side, GTECH's bid of $61 million was about $20 million below Control Data's.
Officials said the price difference made the choice obvious.
"If they had been close, we would have been in trouble," said Michael Law, the Maryland lottery agency's procurement officer.
The recommendation, which will go to the state Board of Public Works for final approval, comes after a year of political and legal sparring among lobbyists for four computer companies, chief among them Bereano and Control Data lobbyist Alan Rifkin.
The fight began when lottery officials announced they wanted to replace Control Data's aging computer system with one that would allow more sales terminals and games and, presumably, produce more revenue.
The lottery raises about $800 million a year.
Only a few companies make and run lottery computer systems, and competition is fierce throughout the nation for each state contract. In Maryland, the companies hired the cream of the state's lobbyist corps.
Rifkin and Bereano both have ties to the administration of Gov. William Donald Schaefer. Mandel is an old friend of the governor's. Bereano recently attended a $1,500-a-plate fund-raiser at the request of Schaefer's aides. Rifkin was asked to buy tickets.
After allegations by Bereano that the Maryland lottery agency's management of the procurement process was biased in favor of Control Data, the Schaefer administration ordered changes in the actual bid specifications, and, in an unprecedented step, removed the final decision from the lottery agency and appointed two outside panels to review bids.
When GTECH officials announced the day before bids were due that they were still unhappy with the process and would not participate -- leaving Control Data with the contract -- the administration extended the bid deadline a month.
Schaefer said such changes were made not as a favor to Bereano or Mandel but to encourage competition for one of the state's largest contracts.
However, Rifkin asserted that the adminstration's decision to adopt new procedures tainted a system designed to prevent politicians from influencing contracts.
Today, however, members of the review panels, administration officials and an outside consultant laid out in detail how the two bids were evaluated, releasing even the internal scoring used to compare everything from each company's hardware to its marketing skills and minority participation.
"This was one of the most comprehensive, careful, thorough procedures I have ever been involved in," said Owen Cole, an executive with 1st Maryland Bancorp and head of the panel that reviewed the financial aspects of the lottery proposals.
Control Data Vice President Marcel Helou said afterward that he is now less concerned with the process than with how GTECH made such a low bid. "We had been concerned with the process," said Helou, but now "we have to look at our whole business practice."
Helou said he could not comment on a possible legal challenge until he reviews the details of the bids and determines whether GTECH's is "realistic."