Monday, January 22, 2018

Extension for US company GTECH

Lottery Board’s tendering process scrapped...

More than $.7 million has been spent on the process to initiate tendering for the National Lotteries Control Board’s (NLCB) online lottery games but the process has been scrapped.

Instead, a decision has been taken to extend the contract of US-based GTECH Corporation to continue to provide hardware/software and marketing services for the online lottery games. 

The value of the contract is estimated at $150 million annually, the Express has learned.

Leading gaming and technology services company US-based GTECH Corporation supplies central system maintenance, terminal installation and maintenance, communications management, field service and marketing support for the 950-plus online terminal machines.

GTECH’s multi-million-dollar contract comes to an end in March but sources told the Express that while plans were on stream to invite RFPs, a decision was taken by the Winston Siriram-led NLCB board to instead grant an extension to GTECH.

The Express learned it is the third contract extension to be granted to the mega gaming company.

In 2006, GTECH signed a five-year contract extension with NLCB to provide new online lottery products and services up to September 5, 2011.

According to the company’s website, an estimated $78 million in revenue was expected to be generated from the extension being granted.

Under the terms of the extension, GTECH provided NLCB with approximately 800 Altura terminals and 400 handheld lottery terminals. The machines, the Express learned, replaced existing terminals and were placed in new retail locations.

The company also provided NLCB with 250 multimedia keno monitors and 400 Express Point Plus terminals.

The Express learned that it was following the appointment of the new NLCB board last year that a decision was taken in July to grant another extension to GTECH.

Sources said a report on the matter was forwarded to the Ministry of Finance to determine the time-frame of the extension to the contract.

The board, sources said, requested a 12-month extension.

An announcement is expected to be made in the next week, the Express learned.

And while Siriram told the Express that the move to grant the extension was justified because of the tardiness of the last board, the Express learned that the former board headed by Mitra Mahabir had sought permission from former finance minister Winston Dookeran to commence the RFP process.

Bills for hotel accommodation, airfare, legal and consultancy fees were racked up as part of the process.

US-based Thorsborg Institute, LLC was hired as the consultants, while Hamel Smith & Company provided legal advice. The Express learned that meetings were held with three companies which also provide the same services as GTECH.

The companies were Canadian Bank Note, Scientific Games Corporation and Intralot.

However, for reasons unknown the proposals were scrapped and a decision was taken to grant the extension.

Sources told the Express all that was needed to complete the RFP process was for the three companies to be invited to submit bids for the contract in accordance with the specifications.

According to Siriram, the NLCB is left with no choice at this point but to grant the extension to avoid the online games being shut down. Asked why the present board failed to follow through with the RFP process, Siriram insisted that time had run out.

Siriram said: “The inefficiency of the civil service caused it. We could have been in a better position if the previous board acted how they were supposed to.  When we appointed the first thing we looked at was the RFP. When I looked at the notes before me the Finance Ministry advised that we needed at least 18 months to complete the entire RFP process.  The new board started in January 2013, therefore, the 18-month time-frame will take us to June 2014. 

“Under the circumstances what we have going forward could be the best offer. The Ministry of Finance is looking at the matter at this time. The contract NLCB has with GTECH is up in March. We did not go out for RFP because of the inefficiencies. The time required to conduct the process efficiently was not available to NLCB. We are not renewing the contract; the NLCB is granting an extension. The time required for the RFP process is not available to us as GTECH’s contract expires in March and we need more than nine months if the NLCB decides to go out for tender. The entire job is extensive. It is the entire central processing system. Nothing can go wrong. When a lottery is drawn players can cash in their winnings three minutes after.”

Siriram said the ministry was expected to approve the extension in January.

“The minister asked for various options in terms of the period of the extension. At one time it was suggested to grant the extension for five years, then two years or one year. The ministry is dealing with it,” Siriram said.

Mahabir said he had no comment when reached by the Express last week.

Contacted last Saturday, Finance Minister Larry Howai said his ministry is reviewing the matter.

Asked whether the ministry granted the extension to GTECH, Howai in an e-mailed response to the Express said: “Recommendations have been made by NLCB and officers of the Ministry of Finance and Economy are reviewing the matter. We expect that the review should be completed in the coming week.”