MHP Protests Lottery Pact, Wants CJRW, Ghidotti-Vines Disqualified

MHP Protests Lottery Pact, Wants CJRW, Ghidotti-Vines Disqualified
Sharon Tallach Vogelpohl

Five days after one competitor protested the awarding of a five-year $34.5 million contract to CJRW to handle advertising and public relations work for the Arkansas Scholarship Lottery, another finalist has filed its own protest, seeking to disqualify both CJRW and the original protester, Ghidotti-Vines.

Mangan Holcomb Partners said in a letter that it should keep the lottery work, echoing Ghidotti-Vines' protest that CJRW had failed to disclose a conflict of interest, and adding an assertion that Natalie Ghidotti's joint venture with Brooke Vines failed to meet the state's bidding requirements.

The agency laid out its claims in a letter from Jane W. Duke of the Mitchell Williams Selig Gates & Woodyard law firm to Edward Armstrong, director of the Office of State Procurement and the judge of any contracting protests. It argues that CJRW should be rejected for failing to disclose a conflict of interest posed by its representation of Oaklawn Park, a lottery competitor, and that Ghidotti-Vines used a "fictitious name" that was not properly registered with the state.

It said the partnership of the principals behind Ghidotti Communications and Brooke Vines of Vines Media LLC "is not a recognized advertising business with the financial, revenue and experience required," and that its name should have been registered with the Secretary of State's office in order to "be authorized to conduct business in Arkansas."

The letter, sent via email on Tuesday, asks that the contract be granted to Mangan, which has had the lottery's advertising business for about two years.

It specifically asks "that OSP grant this protest, modify and revise the Contract award to CJRW, disqualify both CJRW and Ghidotti-Vines, and issue the Contract to MHP." The procurement office, on behalf of the lottery, announced CJRW's selection for the contract on Dec. 6.

Sharon Tallach Vogelpohl, Mangan Holcomb's president, said the firm took action after "thorough examination, consideration and advice from counsel."

"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," she added in a statement.

Mangan Holcomb's complaint focuses on CJRW's not listing its Oaklawn account as a potential conflict in its lottery work. A lottery business plan drawn up by Camelot Global, a London-based consultancy, had specifically mentioned the gaming operation at Oaklawn, in Hot Springs, as a competitor for Arkansas' gambling dollars. The lottery bidding process required firms to disclose any potential conflicts of interest in writing. CJRW did not identify Oaklawn, both protests pointed out.

Natalie Ghidotti, who said she partnered with Vines specifically to compete for the lottery work, disputed the idea that her bid was invalid, citing Section 1.14.A of the bid documentation, which says a "joint response submitted by two or more vendors is acceptable."

"I have spoken with MHP about their protest and understand their goals in ensuring a fair process for all," Ghidotti said in a statement. "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… 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 the Office of Procurement’s response."

Gary Heathcott, the veteran Little Rock advertising executive and a key player in CJRW's presentation, said that he couldn't comment, citing confidentiality rules set down by the state. "All three of us were told we couldn't talk about it to you members of the media. I've abided by that, and we're all still in the same boat."

While Heathcott has strictly abided by the state's prohibition on discussing the contract itself during the 14-day protest period that began after it was provisionally awarded on Dec. 6, some of his comments to Arkansas Business back in November were cited in Tuesday's protest letter.

"CJRW, through its representative Gary Heathcott, has made recent statements to the media that CJRW determined through contact with the [lottery] that its representation of Oaklawn did not present a conflict of interest situation." The letter cited Exhibit 4, quoting the Whispers column from Arkansas Business published Nov. 21.

In those comments, Heathcott said that neither the lottery nor Oaklawn objected to CJRW's working for both entities. An Oaklawn spokesman, David Longinotti, was quoted as saying, "If CJRW can help the Lottery grow the scholarship dollars available to Arkansans, we are fully supportive."

Jake Bleed, the DF&A spokesman who wrote in an email last week that Armstrong would rule on all protests as the state's top procurement official, said that until he does, any comment from the state would "be inappropriate."

In footnotes to her protest letter, Duke says that the Camelot Global business plan recognized Mangan's "vital contributions" to the lottery, quoting Camelot's praise for "an innovative competitive bidding initiative which has added value to the Lottery with a key media partnership."

Another footnote says that proposals for the new contract would let CJRW reap a significantly higher commission on media than MHP currently receives, rising to 15 percent from the current 5 percent. The contracts have fee terms beyond media, however, advertising executives pointed out. A request for contract details from the DF&A drew no immediate response Thursday afternoon. There was also no word on when Armstrong might rule on the protests.

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