KARCHER SUBMITS OPRA REQUEST TO REVEAL COST OF LOTTERY RE-BIDDING PROCESS

Karcher SUBMITS OPRA REQUEST TO REVEAL COST OF LOTTERY RE-BIDDING PROCESS

(FREEHOLD) – State Senator Ellen Karcher (D-Monmouth, Mercer) submitted an Open Public Records Act (OPRA) request yesterday to the State Department of Treasury asking for information relating to the cost associated with having to re-bid the state lottery contract due to a potential conflict of interest with a lobbying firm representing both the State and a bidder.

“While we are looking for solutions to improve school funding and lower property taxes, the State had to waste valuable taxpayer dollars and resources to re-bid the state lottery contract that was originally awarded to the higher bidder instead of the lowest,” said Karcher.  “Taxpayers deserve to know exactly how much of their money was spent and why a lobbying firm was allowed to represent both the lottery commission and a potential bidder.  This was a serious lapse of judgment and steps need to be created to prevent this from occurring again.”

Senator Karcher is specifically asking for the total cost to state taxpayers and to the lottery system resulting from the contract dispute among GTECH and Scientific Games for the period covering 2005-2007.  The Senator is also looking for the calculated costs of personnel, outside legal counsel, outside consultant work, any related professional services used to re-draft the bid documents, OIT time billed to the Department of Treasury as well as any time from any deputy attorney general who may have provided legal guidance/research on this bid process/contract dispute.  Also, if any arbitrators or administrative law judges were used in the dispute resolution process, the costs for their time should be included as well.

In July of 2005, the State Treasury Department submitted a request for proposal for the five year state lottery contract.  GTECH submitted a $142.5 million bid and Scientific Games submitted a $75 million bid.  After Treasury asked both companies to submit new offers, GTECH lowered its proposal to $106.7 million while Scientific Games remained unchanged.  During the bidding process, the MWW Group, a lobbyist and public relations group represented both the lottery commission and GTECH. 

Treasury eventually awarded the contract to GTECH even though their bid was $31.7 million more than Scientific Games.  After Scientific Games protested the outcome, a hearing was held last year and it was concluded that the State should re-bid the contract because of the appearance of conflict that arises from MWW’s dual representation.

“Assemblywoman Beck, as a lobbyist for MWW during the lottery contract bidding, could have saved the State and taxpayers money but she chose to side with her lobbying firm to increase their bottom line,” said Karcher.  “Assemblywoman Beck says she wants to reduce state spending yet she is content to increase spending when it benefits her.”

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