State tourism contract delayed over Democrats’ concern

By David McGrath Schwartz

Friday, June 22, 2012 | 7:41 p.m.

Democrats stalled a $3 million contract to promote tourism in rural Nevada, potentially delaying an advertising campaign to bring visitors to the state that is supposed to be rolled out for the fall and winter.

Lawmakers at the Legislature’s Interim Finance Committee questioned Thursday why an out-of-state firm won the competitive bid for the advertising, public relations and digital marketing contract.

When tourism officials said that the national firm, Burson-Marsteller, had partnered with a Nevada company, RedRock Strategies, Democrats questioned that company’s credentials. RedRock Strategies’ Ryan Erwin is a well-known Nevada political consultant for Republican candidates.

One lawmaker, Sen. Ben Kieckhefer, R-Reno, said the legislative committee was exceeding its authority by delaying the contract, which had been competitively bid.

“I think we’re setting a very dangerous precedent,” Kieckhefer said. The Legislature’s “job is to set the policy that guides bidding processes and to appropriate and allocate money to the executive branch to spend.”

But Democrats said the public expected the Legislature to provide oversight of contracts.

“People in the state care a lot about this,” Assemblywoman Debbie Smith, D-Sparks, and chairwoman of the committee, said about the issue of the state issuing contracts to out-of-state firms.

The state offers a 5 percent preference in bids to Nevada companies on many contracts.

Senate Majority Leader Steven Horsford, D-North Las Vegas, and a candidate for Congress, said companies in Nevada need work.

“That includes PR firms,” he said.

He questioned what an out-of-state company knows about rural Nevada. Similar concerns had been raised by Valerie Glenn of the Nevada-based Glenn Group earlier in the process.

The IFC’s vote to delay the contract was along party lines. Since Democrats currently control both the Assembly and state Senate, the contract will come back again at the August meeting.

Jeff Mohlenkamp, the state budget director, said after the IFC vote, the contract would not be re-bid.

“This was a valid bid that went through the bidding process,” he said.

None of the losing bidders filed a complaint about the award.

Tourism Director Claudia Vecchio gushed about the winning bid’s proposal Thursday. She gave particular attention to a proposal for a mobile application for smartphones pitched by the company. The request for proposal received 19 bids, which were whittled down to the top five, Vecchio said. None of those were Nevada firms.

The state currently has a separate contract to come up with a new brand for Nevada, which is still being developed.

“It will be difficult to roll out the brand without this agency on board,” said Bethany Drysdale, spokeswoman for the Commission on Tourism. She said the winning bid was chosen unanimously by the selection committee. “They totally blew us away.”

Maury Lane, president of Burson Campaigns, a subsidiary of the winning bidder, said the company is eager to get started.

“Right now, we’re hoping this issue can be solved as rapidly as it can be so we can promote the economy in Nevada and stimulate the economy even further,” Lane said. “We put a great plan together. Now it’s time to implement it.”

He said Burson-Marsteller has been partnering with RedRock Strategies for almost a decade.

Erwin, the principal behind RedRock Strategies, is best known for his political campaigns. His latest campaign was Sen. Barbara Cegavske, R-Las Vegas, and her failed bid for the Republican nomination to Congressional District 4, where she would have faced Horsford. Another of his clients is Lt. Gov. Brian Krolicki, who heads the Nevada Commission on Tourism.

Erwin said his company does more than political campaigns, including public relations work with 10 of the Fortune 500 companies.

Erwin said the company did not lobby any lawmakers and did not think it would be an issue at the Interim Finance Committee meeting.

Assemblywoman Maggie Carlton, D-Las Vegas, raised questions at the Interim Finance Committee meeting, including why RedRock Strategies' website is still under development.

In an interview Friday, she said she wanted to understand how the contract would work better and expected it to come up again at the August meeting.

“Part of it didn’t make any sense,” she said. “An out-of-state company hires a Nevada company. How is this whole thing really going to work?”

While she’d prefer in-state companies to get contracts, she said she recognized that the state couldn’t put up a wall or other states could punish Nevada bidders.

She said the political work by RedRock Strategies did not play a role in her vote.

“I would not vote against a contract for political differences,” she said. “That would be inappropriate. That is not going to happen.”