The Office of State Procurement canceled its bid solicitation for the state's biggest advertising contract — the $14 million-a-year deal for marketing state tourism — on Friday, the last business day before written responses from advertising agencies were due on Monday.
Tanya Freeman of the procurement office announced the cancellation in a terse email to Arkansas advertising agencies early Friday, and followed that up with an email saying that the Department of Parks & Tourism "anticipates issuing a new solicitation in the near future for advertising, marketing and website services."
The cancellation came as a shock to Little Rock marketing professionals who were finishing weeks of work on written responses to the bid solicitation, formally known as a Request for Qualifications, numbered SP-17-0058.
Spokesman Jake Bleed of the Department of Finance and Administration, which oversees the procurement office, said the state was revising specifications for vendors and would post the revised bidding documents soon on the OSP website. Freeman's second email had advised potential vendors to monitor the site "for the new posting." This fueled speculation that the state might add pricing as an element of the bid process.
"Word on the street is that they are going to ask for pricing, which wouldn't be a surprise based on all that was said in those legislative sessions over the lottery contract," said one Little Rock marketing executive, speaking anonymously about a $34.5 million contract that placed the procurement process under intense scrutiny recently.
Bleed told Arkansas Business he couldn't comment on "what specific changes will be made to the advertising contract until the new solicitation is posted." He said he expects the new document to be posted "shortly."
"We wanted to make some changes to the procurement to get the best procurement process and the best results for the state," Bleed wrote in an email. "The marketing and advertising contract is important to Arkansas and will definitely be filled soon — the RFQ has been canceled but that in no way means we will not be seeking these services for the state.
"Advertising is critical to the operations of the Department of Parks and Tourism, and it's vital that we get the best procurement on the street and the best vendors as a result. That requires a new bid solicitation and additional time, but we feel it’s worth it given the value and importance of this contract."
Friday's announcement capped months of interest as ad firms, state lawmakers and the news media followed the award of the Arkansas Scholarship Lottery marketing contract to CJRW of Little Rock, which has been the state's main tourism marketing vendor for decades. The lottery contract was awarded after state Procurement Director Edward Armstrong rejected official protests from two rival ad agencies and after a legislative review subcommittee initially voted against it.
Several lawmakers on that panel grilled Armstrong and Bishop Woosley, the lottery director, over that contract, raising concerns about a potential conflict of interest CJRW might face in representing both the lottery and Oaklawn Park in Hot Springs, which had been identified as a lottery competitor. State Sen. Jimmy Hickey, R-Texarkana, also raised the issue of pricing, which he believes should always play a significant role in the state procurement process.
On Friday, Hickey said he couldn't comment specifically on the pulling of the Parks & Tourism RFQ, but he spoke generally about his hopes of improving procurement with a bill he and colleagues are drafting for the current legislative session.
"I cannot comment in regards to this particular RFQ," Hickey wrote to Arkansas Business in an e-mail. "I can tell you that we have been in discussions with OSP in regards to the procurement legislation that we are drafting. Finding a way to include pricing within appropriate RFQ processes is one of many aspects of the forthcoming bill."
The Parks & Tourism marketing contract, worth about $14.4 million for the fiscal year beginning on July 1, seeks a "fully integrated marketing communication vendor" to entice visitors to the state and its parks.
In a departure from two decades of using two agencies, CJRW and Aristotle Inc., also of Little Rock, the state is seeking a single vendor for what it calls "traditional" and "digital" marketing.
"These professional services will be rolled into a single contract," the department's original guide to the advertising agency selection process said.
The decision to cancel the bid solicitation changes the timeline for the process, which originally called for written proposals to be submitted by 2 p.m. Monday, and for three finalists to be chosen for oral presentations later.
While the contract is for one year, state law allows up to six one-year extensions. The original bid documents said the state would monitor collections of a 2 percent tourism tax to gauge the new advertising vendor's effectiveness.
In 2015, the last year for which full numbers are available, Arkansas hosted 28 million guests, some two-thirds of them from out of state. Collectively they spent more than $7.3 billion while in Arkansas, paying about $15 million in the tourism tax. That tax money funds the marketing contract.