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Deal 5: Chairman of AS Eesti Loto Management Board of Heiki Kranich on Procurement Procedure

Deal 5: Chairman of AS Eesti Loto Management Board of Heiki Kranich on Procurement Procedure

Deal 5
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On February 6th, 2017, CEELM reported that Ellex had advised AS Eesti Loto, the Estonian operator of the Bingo Loto, Keno Loto, Viking Loto, and Eurojackpot, on the recent completion of a procurement procedure in order to set up a new internal central information system designed to last for seven years. Heiki Kranich, the Chairman of the Management Board at AS Eesti Loto, agreed to explain how the procurement system was designed.

CEELM: What will the new central information system be used to and why particularly for seven years?

H.K: Central system is the core engine for a lottery business. All tickets, draws, players’ data, financials etc. are created, stored and managed in the central system. Seven years is usually the optimal time during which the business needs and available technological solutions have changed significantly in order to renew or replace the central system.

CEELM: What other procedures did you consider? What were the specific recommendations made by Ellex that led to the choice of the “a two-stage procurement procedure”?

H.K: Our expectation in the process of preparation of this procurement was not only to have a new central system but also to find new ideas. In other procurement processes you would have to describe your wishes in full detail upfront and you only get what you ask for. However, with the two-stage procurement procedure you have a  proposal of ideas first, which might allow you to learn something new that you didn’t know to ask before. The two-stage procurement procedure was proposed by Ellex Raidla as a procedure which helps in the best possible way to meet our needs and expectations.

CEELM: What were your key requirements to the bidders? What was it about the proposal of Novomatic Lottery Solutions that made them stand out from other applicants?

H.K: In addition to the usual requirements regarding financial and economic standing and technical and professional competence, we paid special attention to the modern architecture, openness of the platform, configuration flexibility, and the application of the conceptual design to the functional needs of AS Eesti Loto. Of course, the ratio between the expected cost of the proposed conceptual design and its functional coverage and capabilities were of major importance. The proposal from NLS was chosen as it received the highest total score according to our comprehensive evaluation criteria.

CEELM: In light of the two-step process, how were negotiations influenced by the design of the contest? Did it help to have the pool narrowed or did you find the results of the contest restrictive in the negotiations stage?

H.K: The procurement procedure chosen by us was not restrictive and did not narrow the pool in any way. Moreover, this would not have been in our best interests. This is evidenced by the fact that all important players on this market participated in the procurement.

At the same time the chosen procedure gave us the flexibility and allowed us to specify some important aspects in more detail during the procedure to avoid possible misunderstandings in the later stages.

CEELM: Why did you choose to work with Ellex Raidla on this matter?

H.K: AS Eesti Loto needed a leading law firm with extensive previous experience throughout the whole procurement process, since the project was big and has a key importance for our company. Ellex Raidla has leading experts in the field and extensive previous experience drafting procurement documents, consulting and carrying out complicated procurement procedures, drafting procurement contracts, and representing clients in procurement-related disputes. Taking this and the long term positive cooperation with the firm into account, AS Eesti Loto decided to use the services of Ellex Raidla for the project.

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