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FOB Complaints

FOB Complaints

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Published by David Lombardo
The Franchise Oversight Board outlines problems with NYRA's selection of Global Betting Exchange
The Franchise Oversight Board outlines problems with NYRA's selection of Global Betting Exchange

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Published by: David Lombardo on Jun 16, 2013
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07/10/2013

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State of New YorkFranchise Oversight BoardState Capitol Albany, New York 12224
MEMORANDUMTO:
David Skorton/Robert Megna
FROM:
Robert Williams
DATE:
7 June 2013
SUBJECT:
NYRA/GBE Concerns
Summary
. Review of the documents and materials provided by The New YorkRacing Association, Inc. (“NYRA”), in support of the single source award to GlobalBetting Exchange (GBE) to develop an Advanced Wagering Services and TechnologyPlatform (Platform), finds that the award to GBE was unjustified.In making a determination for this award, NYRA failed to follow its PurchasingPolicy and Procedures Manual (“Purchasing Policy”), which was approved by theFranchise Oversight Board in 2009. Purchasing Policy Section III.F outlines theprocess for conducting a competitive procurement using a Request for Quotations(RFQ), which includes development of specifications; preparation of the solicitationdocument; review of the bids for responsiveness; evaluation of bid responses; as wellas other factors.It is clear that in developing the RFQ and the Evaluation Instrument, NYRA failedto adhere to its own processes:
 
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a. The RFQ failed to set forth the minimum qualifications relative to thecompany or staffing; however, the Evaluation Instrument addressed suchfactors.b. The RFQ indicated that any final agreement resulting from the award maycontain terms and conditions other than those defined in the RFQ.c. The RFQ failed to define the method of the award, such as the criteria to beconsidered, the weights to be applied to the technical criteria, or the relativeweight of technical to cost. The method of scoring, however, as defined in theEvaluation Instrument and accompanying scoring chart, applied three factorsagainst the criteria.d. The Award Summary provided by NYRA (New Technology Overview, dated April 2013) provided a summary of the review of each bidder’s proposal andthe reasons why they were disqualified from consideration after evaluation.Since there were no minimum qualifying thresholds set forth in the RFQ, nobidder should have been disqualified. Had NYRA followed its PurchasingPolicy in developing an RFQ document and making an award, bidders wouldhave been ranked, based on their final scores, and NYRA, in accordance withits Purchasing Policy, could have decided not to make an award if it was notin its best interest to do so.e. NYRA did not sufficiently define the method for bidders to quote a cost forthe service. The RFQ provided three options for bidding cost, one of whichwas an open ended option, which if chosen by any of the bidders, would likelynot have been subject to comparison to other cost proposals, thereby makingit impossible to score this factor.f. In relation to GBE’s cost, NYRA stated in its Award Summary that, based onits Purchasing Policy, it had limited flexibility to negotiate pricing with abidder. There does not appear to be such a limiting provision in thePurchasing Policy.g. Once NYRA began looking at other strategies for an advanced technologyplatform, which included conversations with other track operators about thepossibility of forming an industry cooperative approach, it had an obligationto undertake another competitive bidding process and to set out newrequirements in a newly developed RFQ.
 
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In conclusion, since the bidder pool may now have changed completely due to thenew approach, it is not feasible to rationally state that GBE is the “best” (singlesource) company for this platform development. Therefore, NYRA has notsufficiently demonstrated that no other company in the industry is capable of providing this service.
Review of NYRA Award to Global Betting Exchange of  Advanced Wagering Services and Technology PlatformI. RFQ Process
. The NYRA Purchasing Policy and Procedures Manual (the“Purchasing Policy”) outlines the process for conducting a competitiveprocurement (RFQ) (Section III-F). The process includes, but is not limitedto: Development of specifications for services needed; Preparation of thesolicitation document; Advertisement of the procurement opportunity;Distribution of the RFQ to potential bidders; Review of bids forresponsiveness; Evaluation of bid responses; and Responsibility/integrityreview of apparent winning bidder.
II. Development of specifications and preparation of solicitationdocument
. According to the Purchasing Policy (Section III.F.a),specifications must ensure that bidders know exactly what is required. Thespecifications should be as clear, inclusive and informative as possible andestablish the minimum level of acceptable requirements. The level of detailrequired in the specifications depends on the complexity of the servicerequired. The solicitation should not be written so specifically as to target aparticular bidder, but may contain information obtained from an Request forInformation (RFI) or other means of gathering information prior to a bidsolicitation (i.e. Request for Comment, release of a draft RFQ). Thespecifications must define the Scope of Service and the minimumqualifications of the bidder, including years of experience and experienceperforming similar services; required license or certifications; and financialviability. According to the Purchasing Policy (Section III.F.b), the document shouldinform the potential bidders of the nature of the procurement, any statutoryrequirements, deadline for submission of bids, basis for award and method of award, among other factors.

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