DDB THREATENS SUIT IN CALIF. LOTTERY WRANGLE

Alleges FCB's Numbers 'Cannot Withstand Independent Scrutiny'

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SAN FRANCISCO (AdAge.com) -- In the latest move in the California Lottery account wrangle, an attorney for Omnicom Group's DDB Worldwide, Los Angeles, has sent a threatening legal letter to the California Lottery Commission.

Demands audit
The six-page letter demands the commission conduct an independent audit of media costs proposed by the contract's successful bidder, Interpublic Group of Cos.' Foote, Cone & Belding, San Francisco.

When the five-year, $125 million lottery account went into review last year, DDB was named the apparent winner. But a protest from incumbent Grey Global Group's Grey Worldwide, Los Angeles, led to a decision by the lottery to rebid the contract. DDB came in second to FCB in the rebidding process.

As a result, DDB protested the decision, calling for an audit of the media costs submitted by FCB's media partner in the bid, Interpublic sibling Initiative Media. Last month, the lottery said it

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granted DDB's protest, but decided to open a review only of the competition's media and compensation sections. The remainder of the agency's scores in the process were allowed to stand.

'Flawed' decision
But DDB's attorney's letter to lottery director Joan Wilson called her Sept. 25 ruling "flawed" because it did not cancel the entire review and call for a new one, or establish an independent audit of the media costs.

The letter charged that "FCB's silence on this issue is troubling and only heightens our convictions that FCB's (media cost per point) submission cannot withstand independent scrutiny." It also alleged that the Lottery Commission's move violates a state law intended to benefit California by providing the lowest possible costs on contracts.

Officials at DDB and FCB declined comment.

Officials at the lottery did not return calls seeking comment.

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