Loser of Arkansas lottery's contract protests; asks competitor to be disqualified

Firm’s challenge 2nd for CJRW

Mangan Holcomb Partners has filed a protest with the Office of State Procurement asking that its competitors for the five-year, $34.5 million Arkansas Scholarship Lottery advertising, marketing and public relations contract be disqualified.

Mitchell Williams law firm attorney Jane Duke filed an eight-page protest letter on behalf of Mangan Holcomb, the current holder of the lottery marketing contract. Mangan Holcomb, which began representing the lottery in July 2014, finished third behind CJRW and Ghidotti-Vines.

The state office of procurement announced on Dec. 3 its intent to award the contract to CJRW.

Losing firms had a 14-day window that expired Tuesday to protest the intent to award the contract to CJRW. Ghidotti-Vines, a partnership between Ghidotti Communications and Vines Media, filed a protest Thursday asking that CJRW be disqualified because of a conflict of interest created by that firm also doing ad work for Oaklawn in Hot Springs.

Mangan Holcomb also seeks to have Ghidotti-Vines disqualified because the entity is not registered as a business with the secretary of state's office and therefore "not authorized to do business in the state of Arkansas."

"After thorough examination, consideration and advice from counsel, we have filed a protest related to SP-17-0033," Mangan Holcomb Principal/President Sharon Tallach Vogelpohl wrote in an email, using the bid number. "We respect our competitors and value the process the state has put in place to ensure everyone is held to the same standard of qualifications and compliance under stringent state procurement laws."

Mangan Holcomb's protest letter notes the conflict between the lottery and Oaklawn "is real and not imagined or hypothetical. These entities compete for the same discretionary gambling dollars. This fact is well documented."

Because CJRW did not disclose in writing its work for Oaklawn, it should be disqualified, according to the protest letter.

When the lottery contract was previously available, CJRW passed because it was viewed internally as a conflict of interest with its client work for Oaklawn Racing and Gaming in Hot Springs. Officials with CJRW and Oaklawn said earlier this year they did not consider there to be a conflict of interest.

CJRW consultant Gary Heathcott declined to address the protests. He wrote last week that at "the outset of the oral presentations, the competing ad agencies were specifically instructed by [Office of State Procurement] personnel that it was absolutely against the rules for us or any representatives of our firms to discuss any element of the process with any members of the press until after the award and subsequent contract approval.

"We have followed that rule completely and will continue to do so."

Ghidotti-Vines' qualifications also are questioned in the letter.

"While both are admittedly good and reputable firms, neither firm would have individually satisfied the technical requirements for this Contract," the complaint reads.

Ghidotti Communications President and CEO Natalie Ghidotti noted in an email that under Section 1.14.A of the bid request "[a] joint response submitted by two or more vendors is acceptable." Ghidotti said she has spoken with Mangan Holcomb about the protest and "understand their goals in ensuring a fair process for all.

"Ghidotti Communications and Vines Media created a joint venture agreement with our attorneys back in October before we submitted our response for the Lottery advertising, marketing and PR contract, fulfilling the requirements of Bid No. SP-17-0033 and, particularly, Section 1.14.A of the bid," Ghidotti wrote. "We respect MHP and their leadership and are both aligned in our concerns over conflict of interest issues with CJRW. We'll look forward to hearing from the Office of Procurement's response."

There is no deadline for how long Office of State Procurement Director Edward Armstrong will take to review the protests. State Department of Finance and Administration spokesman Jake Bleed said Armstrong will "make a determination on the protest in a timely manner."

Expected start date of the contract is Jan. 8. Both the contract holder and the lottery can agree to two additional one-year terms beyond the initial five years.

CJRW currently holds the contract with the state Department of Parks and Tourism. That state account, worth about $15 million annually, will be open for bids in March. CJRW was recently awarded the Arkansas Economic Development Commission contract for public relations and branding.

Mangan Holcomb represents the Department of Arkansas Heritage and the Arkansas Scholarship Lottery. It also recently secured the digital portion of the state contract with the Arkansas Economic Development Commission through its subsidiary, Team SI.

Business on 12/21/2016

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