Lottery Shenanigans

November 14, 1990

Funny things can happen when a $75 million contract is at stake. And funny things are indeed occurring as the state tries to pick a company to upgrade and expand Maryland's vast network of lottery computers. The process is becoming more and more politicized, leaving clouds of doubt and suspicion over the Schaefer administration's handling of this controversial contract.

Twice in recent weeks, Gov. William Donald Schaefer intervened in the selection procedure, each time aiding companies that included a firm represented by a major Schaefer fund-raiser and former Gov. Marvin Mandel. Each time, the governor claimed he was acting to insulate the contract award from political influence. Instead, Mr. Schaefer achieved the opposite result.

Maryland's much-praised procurement law sets up a lengthy procedure to ensure that contractors are chosen on technical merit and lowest price. Yet the governor has opted to create his own process for awarding the lottery contract, one that puts Mr. Schaefer and his budget secretary in decision-making positions.

That's precisely what lobbyist Bruce Bereano, a Schaefer fund-raiser, and other representatives of three computer companies wanted. They claim that state lottery officials unfairly drew up the contract proposal to favor the current vendor, Control Data Corp. They got the governor to set up special panels to evaluate their bids outside the normal procurement process, with the political Board of Public Works as final arbiter.

But that still didn't satisfy the protesters. On the same day last week, all three firms withdrew their bids, claiming Control Data still had an unfair advantage; two days later, the governor changed the ground rules to accommodate them.

This makes a mockery of the lottery agency's meticulous procurement procedure. The governor has substituted his expertise in drawing up a computer contract for the Battelle Memorial Institute, the consultant hired for $150,000 to draft an impartial proposal. The ultimate decision now rests with Mr. Schaefer and the Board of Public Works, not with the state's computer and lottery experts.

Such a situation is tailor-made for influence-peddling lobbyists. Now they will try to sway the politicians on the Board of Public Works by whatever means they think most effective. They have succeeded in circumventing Maryland's impartial procurement law, thus setting the stage for a return to the days when political ties -- not competence and price -- decided contract awards.

It is too late to patch up this tainted -- and much-altered -- process. Instead, the governor should start from scratch by asking the Battelle Institute to oversee the selection of the best bid -- according to the state's procurement law. At all costs, Mr. Schaefer must find a way to restore integrity to Maryland's contract-award system.

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