News from Sept 19.1998....
I guess you are right about press announcements. This is still pending approval of the VA lottery commissioner.
Firm again wins lottery contract
/ First deal was scratched after
stockholder identified
Saturday, September 19, 1998
BY JEFF E. SCHAPIRO
Times-Dispatch Staff Writer
The California company that lost a multimillion-dollar contract for
lottery-ticket vending machines because a Virginia Lottery employee was a
stockholder has won the business in a new round of bidding.
The Department of the Lottery told On-Point Technology Systems Inc. it
again beat out Interlott Technologies Inc. of Cincinnati, which raised ethical
questions about the first award -- prompting the state to junk the contract in
December.
The contract is awaiting final approval from lottery Director Penelope W.
Kyle.
The new contract is worth about $6 million and covers the purchase of more
than 1,000 terminals for dispensing 12 varieties of scratch-game tickets. The
disputed contract, at $4.3 million, was for 700 machines.
Lottery spokesman Ed Scarborough said yesterday that On-Point, of San
Diego, had been selected a second time after a new, four-employee
bid-evaluation committee screened the competing offers.
"All I can say is that I hope people understand we had a difficult situation
and that we took steps to remedy the situation . . . and that it was an honest
process," Scarborough said.
Gov. Jim Gilmore and Attorney General Mark L. Earley, both of whom
viewed the vending-machine flap as an embarrassment for the lottery, said
through their spokesmen that the new contract appeared to be aboveboard.
"As long as the proper procedures and precautions were taken, the
governor would be satisfied with the awarding of this contract," said Gilmore
press secretary Mark A. Miner.
Likewise, Earley's communications aide David B. Botkins said: "We don't
micromanage any agency, particularly an independent one like the lottery.
They have gone through a new procurement process and we have no reason
to believe there are any problems with this one."
Earley has conducted an inquiry into the contested contract but has yet to
prepare an official opinion on it for a Republican delegate, Jo Ann S. Davis
of York, who questioned the legality of the original pact.
Neither Interlott officials nor their lawyer could be reached for comment.
Kenneth W. Thorson, Virginia counsel for On-Point and former director of
the state lottery, said his client was awarded the contract on the strength of
its product. On-Point "is pleased to be have been named as the winning
contractor," Thorson said.
Because the Virginia Lottery is exempt from the procurement law, it does
not have to award contracts to the lowest bidder.
Kyle scrapped the original contract after learning that David R. Korosi, an
agency official on the panel that assessed the first bids, owned 800 shares of
On-Point.
The holdings did not represent a conflict of interest under state law because
they did not exceed a 5 percent stake in the firm.
But the episode raised questions about lottery procurement and whether the
agency has proper safeguards for protecting the integrity of the
$914-million-a-year, state numbers game.
Korosi, who has since sold his On-Point stock, was transferred to the
lottery's Farmville office. He had been administrator of online computerized
games at lottery headquarters in Richmond.
In the wake of the controversy, the Virginia Lottery has called on the
General Assembly to follow the lead of other lotteries and consider banning
employees from owning stock in gaming companies.
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