The Office of State Procurement has rejected one of two rivals' protests to the choice of CJRW for a five-year, $34.5 million advertising and public relations contract with the Arkansas Scholarship Lottery.
State Procurement Director Edward Armstrong found that the protest by Ghidotti-Vines, a Little Rock entity that finished second to CJRW in the scoring of presentations, was not sustainable because the partnership between Natalie Ghidotti of Ghidotti Communications and Brooke Vines of Vines Media LLC "does not even appear to exist as an entity."
That conclusion echoed one part of a protest filed by the third finalist for the contract to represent the lottery, Mangan Holcomb Partners, the Little Rock ad agency that has been doing the work for about two years. No response to the Mangan protest had been received by the close of business Tuesday.
Both Ghidotti-Vines and Mangan had objected in their protests to CJRW's failure to disclose its contract with Oaklawn Park, the Hot Springs horse track and casino, as a potential conflict of interest to working on behalf of the lottery. The lottery's business plan had identified Oaklawn as a competitor for the state's gaming dollars.
Armstrong's letter did not address the conflict-of-interest aspect, even though it was at the heart of the Ghidotti-Vines protest. Instead, it described the Ghidotti-Vines as two legally distinct entities that "contracted with each other for the purpose of submitting" a proposal for the lottery work.
Armstrong's letter came in reply to Alex T. Gray of the Steel Wright Gray & Hutchinson law firm of Little Rock. Gray had written Ghidotti-Vines' official letter of protest in mid-December.
"In reviewing the joint response that Ghidotti and Vines submitted, I do not see where a single contractor is identified as the prime contractor, as is required" to meet the requirements in the state's bid solicitation process, Armstrong wrote.
The letter did not give any explanation for why the Ghidotti-Vines submission was not judged as faulty before the protest.
Ghidotti, who said last month that she and Vines created a joint venture agreement with their attorneys in October before submitting their lottery bid, said that she had expected the conflict-of-interest issue to be addressed.
"We are in disagreement on the issues pertaining to our legal entity addressed by Mr. Armstrong, and will be determining next steps," she said in a statement. "As a finalist in this RFP process, we expected that our specific protest of a conflict of interest with CJRW would be addressed, and it wasn’t, which is disappointing at best."
Sharon Tallach Vogelpohl, president of Mangan Holcomb, said in an email to Arkansas Business on Tuesday that she and her team had not received "any information or updates from procurement since before the holidays."
Mangan laid out its objections to the CJRW award in a letter from Jane W. Duke of the Mitchell Williams Selig Gates & Woodyard law firm, arguing that CJRW had failed to disclose its Oaklawn conflict and that Ghidotti-Vines had used a "fictitious name" that was not properly registered with the state.
CJRW has represented Oaklawn since the 1970s and did not compete for the lottery business the last two times it was open, with several advertising executives speculating that lottery work was seen internally as a conflict with Oaklawn.
Gary Heathcott of CJRW, who was instrumental in making the winning presentation, said that CJRW had received no word from the state about the protests and that he would continue to comply with state requirements that competitors make no comment on the contract until it is official.