04/01/2008 11:00PM

Panel faults NYRA's no-bid deal


A New York commission has concluded that the New York Racing Association violated a section of state law governing the awarding of contracts by hiring the consulting firm Getnick and Getnick last year without other bids, according to a report issued by the commission Wednesday.

The State of New York Commission of Investigation did not void the contract but recommended that the state's two racing regulatory agencies - the New York Non-Profit Racing Association Oversight Board and the State Racing and Wagering Board - be given clear authority through legislation to enforce the state's requirements of competitive bidding.

NYRA hired Getnick and Getnick last July, awarding a five-year contract worth $125,000 a month. The company had been appointed by a federal judge to monitor over an 18-month period NYRA's compliance with a deferred-prosecution agreement reached in 2005. The agreement allowed NYRA to avoid prosecution stemming from a variety of financial crimes committed by the association's mutuel clerks.

NYRA and Getnick and Getnick have argued that the contract was exempted from competitive bidding because of the unique nature of its business. The commission "strongly disagrees" with that assertion, the report said.

"While Neil Getnick told the commission that his firm was unique because of its prior relationship with NYRA, the commission found that NYRA had employed other business integrity consultant firms, and that Getnick and Getnick was not the only firm qualified to provide integrity services to NYRA," the commission's chairman, Alfred Lerner, said in a statement. "The irony here is that had NYRA used the bidding process and concluded that Getnick and Getnick was the most qualified firm, NYRA would have had a reasonable basis for hiring the firm."

NYRA was granted a 25-year extension to its franchise in February in a bill passed by the legislature. Under the bill, a new oversight agency is expected to be created that would set policies for NYRA's bidding procedures.

"We look forward to working with the new board to make sure that NYRA's competitive bidding policies are within the framework of the law," said John Lee, a spokesman for NYRA.