Montana rejects gmabling network bid

Wednesday, Jan. 5, 2000 | 9:24 a.m.

Jim Oppedahl, administrator of the Gambling Control Division, said the bid submitted by Tetragenics was incomplete and lacked the detail required by the state when it solicited proposals in August.

His office will send out another request for bids later this month in hopes of getting more and better responses.

Oppedahl said he will talk with other potential bidders to see what changes can be made in the request to attract more competition. At least one company, Video Lottery Consultants of Bozeman, said it had decided not to bid the first time because the $2.4 million available for the state to spend on the contract was too little.

But, he said, that is all the money the Legislature provided. So the revised request for bids will emphasize the state wants a basic system with no frills, he said.

"What we're looking for is just a basic bare-bones system that does the accounting and game evaluation that's needed," Oppedahl said.

The goal of signing a contract by June 1 and have a network operating with 3,000 machines by Jan. 1, 2001, is still reachable, he added.

"A little bump here is not necessarily going to derail that."

The 1999 Legislature authorized the state to set up a network that will use phone lines to daily monitor the play of video gambling machines to ensure accurate reporting for tax purposes.

Video gambling is big business in Montana, with the poker and keno machines generating $253.5 million in gross income last year.

The computer system would do away with a cumbersome manual process that involves piles of paperwork and can lead to mistakes in calculations. State officials won industry support for the plan by making participation voluntary.

But before any contract can be signed, owners of at least 70 percent, or 10,000, of the operating poker and keno machines in the state must agree to participate.

Oppedahl said his office gave Tetragenics an opportunity last month to provide additional detail about its proposal, but the company failed to supply sufficient information to make it acceptable.

"Overall, the proposal - while it was improved from the first submission - did not adequately clarify the proposal," he said. "It's not a complete response."

Oppedahl said the Tetragenics proposal lacked a detailed project plan, documentation about the automated accounting and billing system, and training programs for staff running the system, he said.

He also said the company's $1.62 million bid covered only three years, even though the contract was to be for five years.

The executive director of Tetragenics, the computer subsidiary of Montana Power Co., said Tuesday no decision has been made on whether to prepare a second proposal.

The problem with the first request was that the state wanted bidders to offer a complete system and be able demonstrate its operation, said Rita Spear. That would require a big upfront expense for a company, without knowing whether it will get the contract or whether enough machine owners agree to participate in order for a contract to be signed, she said.

Spear would not say how much Tetragenics has spent to prepare its proposal.