Essay 4598

From The Chicago Sun-Times…

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Will politics be hurdle for black ad agency?

R.J. Dale has been a winner for state’s lottery sales

BY MARY MITCHELL, Sun-Times Columnist

If you raise legitimate revenues, win awards and survive inspectors who go over your books with a fine tooth comb, you ought to at least be able to keep doing whatever you’re doing.

Unfortunately, sometimes hard work isn’t always rewarded.

That’s what concerns R.J. Dale, the founder of R.J. Dale Advertising and Public Relations, a highly acclaimed black-owned ad agency that is responsible for energizing the state’s lottery sales.

When a general market agency resigned in 2004 amid rumblings that the lottery agency was targeting African Americans, Dale stepped up. The small ad agency competed against 18 other agencies to secure a multiyear, multimillion-dollar contract.

“Not only did we win the competition, but the margin between the first-place winner and the second-place winner was the highest in the history of the competition. We blew them away,” Dale told me.

Under the contract, Dale’s firm was supposed to serve as the general market advertising firm for two years until June 30, 2006. But the contract included up to three one-year renewal options. Because his company has raised revenues throughout the contract period, Dale had expected to hold onto the deal for the entire renewal term.

“[The state] has made a decision that there will be no fifth year even though they have not yet determined what our performance was in the fourth year,” Dale said. “So the decision seems to be arbitrary. There’s no reason for it.”

A misunderstanding

Katie Ridgway, a spokeswoman for the Illinois Lottery, insists that R.J. Dale’s final option year, which ends in 2009, is not now in jeopardy.

“R.J. Dale is doing a good job, and there’s no plan at this time to end their contract,” she said.

Ridgway chalks up the dispute to a misunderstanding involving new procurement rules put in place after Dale’s contract was awarded. Those rules prohibit the state from awarding a contract that has an option period that is longer than the base contract. In the case of Dale, the contract was awarded for a full two years but contained three one-year options.

Dale said he has been notified by the state’s procurement office that a Request for Proposal for the lottery contract would go out next month.

“I certainly feel it is unfair and it is unwarranted based upon our record of performance,” Dale told me. “We have earned a fifth year connected to the contract.”

Despite increasing lottery sales and winning several prestigious awards for its creativity on the lottery account, in 2005 Dale’s performance under the contract was scrutinized to the point that some observers in the African-American business community called it a high-tech trashing.

Controversy over how Dale handled the $20 million lottery contract faded when a special audit found no evidence that the company misused state funds, despite having inadequate financial records.

To many black business owners, Dale was under special scrutiny primarily because he owned a small ad agency that was given a seat at the table where state contracts are divvied up.

8 percent increase in sales

R.J. Dale Advertising claims to have ushered in the first lottery sales increase (8 percent) in 10 years and increased instant ticket sales by 11 percent. In fiscal year 2005, the Illinois Lottery saw its largest profit ever, contributing a record-breaking $614 million to the Common School Fund.

“It is impractical to have a company perform as we have performed and to cut them off without explanation,” Dale said. “I would think we would be held as one of the bright spots in their contracting process because we have brought revenues.”

Although this dispute is supposedly about Dale’s contract, it really isn’t.

The perception persists that you have to know somebody, or at least know somebody who knows somebody, in order to get a piece of the action in this city and state.

And that is probably true.

But once a person manages to get a foot in the door, he or she is expected to provide taxpayers with quality goods and services.

R.J. Dale is a good example of what a small African-American ad agency can accomplish in a highly competitive market. Hopefully, old-school politics won’t be allowed to shut him, and other firms like his, out of the process.