R&R requests bidding for LVCVA ad contract

Gary Thompson

Thursday, Dec. 3, 1998 | 11:36 a.m.

R&R Advertising, which has held the lucrative advertising contract for the Las Vegas Convention & Visitors Authority for 18 years, has requested the pact be put out to bid.

R&R Chief Executive Billy Vassiliadis sent LVCVA board members a letter Wednesday suggesting the move after questions arose about the propriety of awarding the five-year contract without competitive bids.

The LVCVA spends more than $30 million a year on promoting Las Vegas. Typical agency commissions run to 17.5 percent of the amount spent buying adds. R&R also receives production and consulting fees for its work on the account.

The spending is based on room-tax revenues and, with more than 10,500 new rooms scheduled to open next year alone, is expected to climb to as much as $45 million a year by the end of the contract.

Vassiliadis' letter requested the board "consider a competitive bid process for the next five-year contract," noting the period will be "the most challenging in this community's history.

"It is important for the credibility of the LVCVA and my company that a competitive process is used," Vassiliadis wrote. "I would not want R&R or the authority to be cast in a negative light driven by adverse public perceptions."

"It really bothers him that there's a perception out there that he's got the contract because of juice," said a Vassiliadis friend who requested anonymity. "He genuinely wants to do the right thing."

This morning, Vassiliadis said he didn't know whether the request was a smart move, "but it was the right one.

"I pride myself in getting in front of a train for my clients and not pushing them in front of a train for me," he said.

"And I believe we have the most talented people in the world working on behalf of the LVCVA. I don't want them to spend the next five years worrying about public perceptions. I want them to be proud of their work."

The letter was sent to LVCVA President Manny Cortez and the authority's directors after the Sun contacted all 12 board members to ask about the contract, which is scheduled for discussion at Tuesday's LVCVA meeting.

The only two board members who responded to the contacts said they believe competitive bidding is appropriate when public financing is involved.

"I've been very, very pleased with R&R, but it's my candid and personal opinion that this contract should be put out to bid," said downtown motel owner Juanita Wilson. "I don't know if there's anyone better than R&R, but if there is, they should be allowed to bid."

"I've always felt that competitive bids are appropriate when using government tax dollars," said Las Vegas Mayor Jan Laverty Jones. "That in no way infers the current provider doesn't do a wonderful job, but you're talking about a multi-million-dollar contract."

The ad contract has been put out to bid only once since 1980, LVCVA sources said. In 1994, the board awarded R&R the pact without seeking proposals from other advertising agencies.

Some board members have indicated recently they believe it would be unfair to request proposals from other agencies that could cost $50,000 or more to prepare when R&R has an 18-year track record with the authority.

"You tell me somebody's going to worry about risking $50,000 to get a contract like this?" asked an advertising executive not associated with R&R. "They'll be lining up to present."