Three of four potential suppliers of a $75 million computer system for the Maryland Lottery Agency have decided not to submit bids, virtually eliminating the cost-saving achieved by competition and apparently leaving Control Data Corp. the only vendor still in the running.
Anxious to increase lottery revenues in a period of declining tax revenues, the Maryland State Lottery Agency has been trying for most of this year to buy an updated and larger computer system -- but the procurement process has been derailed at least twice by lobbyists representing vendors who objected to the process.
Whether yesterday's action by the three vendors would further delay the procurement was unclear. The protesters asked for a delay in the submission date for the bids.
"It has been the state's intention all along to generate as much open and free competition as possible for this contract," said Paul E. Schurick, Gov. William Donald Schaefer's press secretary. Mr. Schurick said he could not speculate on what the governor would do if only one bid is submitted tomorrow.
While all three of the companies that withdrew commended Governor Schaefer, who took charge of the controversial procurement process last week, all three also renewed their contention that the basic bidding document is tilted toward Control Data.
"After a careful review of the [specifications], we have determined that they are so narrow as to be prohibitive," wrote Norman T. LaMarre, president of Scientific Games Inc. in Atlanta.
Fred Bandierini, vice president and general manager of General Instrument Corp. in Hunt Valley, said his company could not get around "major obstacles" in the specifications. Among these, he said in a letter, were provisions which included the time provided for supplying the equipment, the use of three pricing options which he said put too much "subjectivity" into the process, and a trade-in allowance for Control Data Corp. -- which currently supplies the agency computers.
And Guy B. Snowden, chairman of the board of GTECH Corp., wrote, "You have not gone far enough to insure that the best interests of the state of Maryland are served. The [specifications] contain serious flaws and reflect an apparent bias toward the incumbent vendor."
All four vendors are represented in Annapolis by well-paid and influential lobbyists.
Mr. Schaefer moved to establish two special committees to review the proposals independently of each other. This removed the procurement from normal channels and was designed to provide some protection from charges that the contract was being awarded on the basis of friendships and political alliances.
At the same time, Mr. Schaefer ordered his budget secretary, Charles L. Benton Jr., to assume a more active role in the selection process. Mr. Benton's staff had already been involved in advising the lottery agency's procurement officer in writing the so-called request for proposals.
Under the enlarged and adjusted process created by Mr. Schaefer, different weights were assigned to the technological and financial aspects of the bids. Yesterday, the potential bidders said these changes required them to recalculate certain aspects of their proposals -- another reason, they said, for putting off the submission date.
Bruce C. Bereano, the lobbyist who represents GTECH and who has been orchestrating opposition to the process, said his company will lodge a formal protest and pursue it through all appropriate channels. He said he knows of no plan currently to take the matter to court.
Under the usual procedure, vendors with complaints about bid specifications are required to protest in writing to the agency's procurement officer. If unhappy with the response, they can appeal to the agency's director, William F. Rochford, and then to the Board of Contract Appeals.