Las Vegas-based Smart City Networks LP lost its court battle Tuesday to hang on to the lucrative telecommunications contract for the Las Vegas Convention Center and Cashman Center.
After hearing arguments that hinged on esoteric points of contract law, Clark County District Judge Susan Scann ruled that the contract process did not qualify as a competitive bid despite wording that “certainly was not the best.”
As a result, Smart City had no right to protest the Aug. 13 award to a local subsidiary of Cox Communications, which took over land line and wireless services at the two facilities Sept. 29.
Moreover, waiting until Sept. 25 to file its lawsuit, after it had largely removed all its hardware and Cox had moved in with its equipment and people, “resulted in an inexcusable delay,” Scann said.
The Las Vegas Convention and Visitors Authority, which owns the two buildings, has valued the contract at $70 million over its seven-year life, growing by an additional $30 million with a potential three-year extension.
Smart City had run the telecommunications functions since 1998 and has added about three dozen convention centers across the country to its client roster.
“We are considering our options,” Smart City attorney William Maupin said after the hearing. “It think it is important to emphasize that this has been a highly successful collaboration (with the authority) for the past 15 years.”
For the authority, the ruling vindicated a process that began last year with the decision to test the waters since the technology had changed considerably from the time Smart City started.
Authority attorney Todd Bice argued that the authority had decided to solicit proposals instead of straight bids, an important distinction under Nevada law.
A bid is awarded purely on the basis of price to any company that meets all the qualifications; a proposal entails a subjective rating system that grades companies not only on dollars but also quality.
For the telecommunications contract, Cox beat Smart City by 90 points to 86 in categories that included customer service, experience and management.
In addition, Cox promised to invest $9.5 million to Smart City’s $2 million in upgraded technology to improve the system’s speed and capacity, and it came out ahead in the overall financial analysis.
Bice depicted Smart City as “incumbents that got lazy. They rested on their laurels and were outdone by competitors.”
The authority’s board voted 13-1 on Aug. 13 to go along with the staff’s recommendation in favor of Cox concluded a week earlier.
An attempt to put the matter on the Sept. 10 agenda, backed by what Maupin said was a $250,000 protest bond, did not make any headway.
However, Bice wrote Smart City in August to say that no protest was legally allowed and returned the check to the company at the end of the hearing.
Smart City had hired attorney Chris Kaempfer and former U.S. Sen. Richard Bryan, whom Bice termed the “Delta Force of lobbying,” to try to sway the board in favor of Smart City.
The process of using a proposal worked by helping to eliminate the effect of behind-the-scenes persuasion.
Smart City President Mark Haley declined to comment on why he thought Smart City lost.
“We are still trying to find that out,” he said.
However, court papers filed by the company list eight cities where Cox claimed it had the telecommunication contract that were actually held by Smart City.
Contact reporter Tim O’Reiley at email@example.com or at 702-387-5290