Commission Says Earlier Bids Lacked 'Valid Comparisons'

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SAN FRANCISCO ( -- The California Lottery Commission today asked finalists for its five-year, $125 million advertising account to rebid the media and compensation portion of the account under new guidelines.

Lottery director Joan Wilson said the bids submitted by the finalists for media costs were done in a manner that prevented the lottery from making "valid comparisons."

"I believe that I need to be able to compare apples to apples and oranges to oranges in order to reach a reasoned, sustainable recommendation to the Lottery Commission for the Lottery's next General Advertising representative," she said in a letter to finalists.

New proposals required
"Unfortunately I will not be able to make such a recommendation unless I can obtain new price/cost proposals from all of the finalists."

Ms. Wilson said only the media portion of the lottery pitch will be reviewed under an amendment. Other scores given to aspects of the pitch such as creative would not be changed, she said.

The commission last year put the account into review and awarded the contract to Omnicom Group's DDB Worldwide, Los Angeles. Incumbent Grey Global Group's Grey Worldwide, Los Angeles, protested on the grounds of disclosure concerning media buying agencies. The commission found fault with both DDB's and

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Grey's documentation, and decided to call for a second pitch.

FCB challenged by DDB
In July, Interpublic Group of Cos.' Foote, Cone & Belding Worldwide, San Francisco, was declared the apparent winner of the second round. But DDB protested, based on issues related to FCB's stated media buying costs. It was this protest that Ms. Wilson granted. Interpublic's Initiative Media is FCB's media buying partner in the pitch.

The commission in the interim had decided to extend its contract with Grey Worldwide until a new shop takes over.

In addition to FCB, Grey and DDB, Interpublic Group of Cos.' McCann-Erickson Worldwide, Los Angeles, was a finalist and will be asked to resubmit its media proposal under the amendment, Ms. Wilson indicated in her letter.

Under the lottery's scoring system, FCB obtained 94 of a possible 100 points, and scored 24 out of 30 on the media and compensation portions of the bid. DDB had 71 points, with 10 out of 30 for the contested media points. Grey came in a close third with 69 points, and 15 out of 30, while McCann was fourth with 62 points and five out of 30 points.

'Never comptemplated this'
"We never contemplated this scenario," said at executive at one of the participating shops.

In Ms. Wilson's two-page letter to contenders, she stated that DDB challenged FCB's media costs, saying that FCB went from the worst media price proposal in the first pitch to the best price proposal in the second pitch. DDB's protest had requested an independent audit of FCB's media submission.

"If FCB's submission is determined inappropriate by the auditor, DDB requests FCB's disqualification and the identification of DDB as the apparent successful competitor," the letter said.

But Ms. Wilson said she and her staff found that "procedures for the award of the contract were not followed by more than one finalist." DDB's requested independent audit, she found, would be "pointless."