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The Vise Tightens On D.C. Lottery

Lost in the avalanche of election news was a big development in the long-running saga of the D.C. Lottery contract, a multi-million deal that has become a symbol of the District's inability to switch from a failing contractor to one that promises to do a better job at a lower cost.

The city's Contract Appeals Board last week issued a scathing ruling rejecting complaints by LTE, the current contractor, that it had been treated unfairly by the city in the process of selecting the next lottery operator.

Chief Administrative Judge Jonathan Zischkau, writing for himself and Judge Warren Nash, said the challenger for the contract, W2I, outscored the current contractor in every category on which the two were compared. And when the two proposals were examined in further detail, W2I's advantage grew even larger, with the challenger offering better services at a more attractive price, the judges concluded.

"W2I's proposed fee rate would save the [District lottery board] approximately $40,000,000 over the next 10 years" over the current cost of the operation, and that would be double the savings that LTE offers in its proposal for the contract, the judges wrote.

LTE, the company run by Leonard Manning that has controlled the D.C. Lottery since its inception, alleged that W2I got unfair breaks from the city in the bid process. But the judges said there is no evidence that W2I was treated improperly or in any way that disadvantaged LTE. And the judges rejected LTE's contention that the city officials who rated their company's performance "poor" were biased in some way against the longtime contractor.

"We see no basis for LTE's contention that the [city ratings officials] lacked neutrality and objectivity," the opinion says.

W2I obviously welcomed the appeal board's decision. "The city did the right thing," says Crystal Wright, a spokesman for Intralot, the international gambling company that has teamed up with W2I to bid for the D.C. contract. "Now the D.C. Council under the leadership of Chairman [Vincent] Gray needs to act responsibly and schedule a vote on the lottery contract, which the mayor has submitted and withdrawn three times."

Three council members told me that they expect to vote on the lottery contract at their first meeting following the appeals board decision, which would be Nov. 18.

But nothing's easy in this town: The CityPaper reports that LTE plans to appeal last week's decision to D.C. Superior Court, and although the Fenty administration is once again pressing the Council to vote on the contract, there's no word from chairman Gray about whether he's now finally ready to make that happen.

By Marc Fisher |  November 10, 2008; 8:20 AM ET
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Please email us to report offensive comments.

I used to live across from a commercial building owned by Warren Williams. Based on that experience I wouldn't put him in charge of anything.

Posted by: washpost4 | November 10, 2008 10:54 AM

Couldn't we find an outside company without all the seemingly sleazy political connections that both these companies have to run a clean and cost effect lottery program for the District.

This fight just seems so reminiscent of the past.

It really seems that the same 100 people try to benefit from District contracts and they just play musical chairs.

The only real losers in this continuing game of musical chairs who don't ever find a seat are the taxpayers.

Posted by: peterdc | November 10, 2008 1:52 PM

It seems as though the best option would be to have the CFO's office re-submit the Lottery RFP for bids given all the political positioning and arm-twisting involved with the current contract. Hopefully that would attract some outside companies to the table who are not internally connected with the DC political power players.

Posted by: DarkWater | November 10, 2008 3:41 PM

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