Four local business owners converged onto the public plaza at Rolfe Square in Cranston on Aug. 15 to advocate for the proposed extension of IGT’s contract with the state, which would keep the company in Rhode Island until 2043.
Organized by Keeping Jobs in Rhode Island, a community organization that has been vocal since the proposed contract extension became public at the close of the 2019 legislative session in June, the rallying cry for the business owners in support of the deal was centered on jobs.
But more than simply focus on the approximately 1,100 Rhode Island jobs that IGT bolsters – less than 100 of which are not necessary to be based in the state, and which advocates for the deal say would be lost should IGT not get the contract extension – those gathered on Thursday hit on a different angle, one that painted IGT as a facilitator of growth for small local businesses.
“Our company grew as GTECH grew,” said Michael Sepe, vice president and COO of Electro Labs in Cranston. “We went along for the ride.”
Sepe recalled when Electro Labs first started 29 years ago as a small network wiring company and a division of his existing family business. He was able to procure a small installation project with GTECH – a predecessor of IGT – shortly after that company moved into its first West Greenwich building.
“We hit the mark, and we hit it well,” he said. “That one project led to another project and to another project. We were, at that point, a staff of two. Soon after, GTECH became my very first, largest customer.”
Now, Electro Labs has a staff of roughly 50 Rhode Islanders and has gone on to do wire installation for six of IGT’s buildings, including the world headquarters in Providence.
“Each step of the way, GTECH gave us an opportunity to evolve our business, always demanding the highest quality of service and craftsmanship,” Sepe said. He said the ability for Electro Labs to list GTECH and IGT as a reference for its work “was like a golden seal of approval for my company. It allowed our businesses to grow significantly.”
Bill Murray, general manager of the Providence-based audio-visual service provider ATR Treehouse, shared a similar story of a relationship with IGT going back 30 years, when the company first started in a two-car garage.
“GTECH back then was our first major corporate client,” Murray said. “That relationship, along with many long-term partnerships with Rhode Island’s biggest companies, let us grow and helped us create new jobs.”
Murray said that to lose a client like IGT would pose serious challenges to the continued success of his business.
“If IGT were to leave, my company would certainly still be here, but we’d have a big challenge ahead of us to find the additional work,” he said. “We’d have to find that work, otherwise we’d face some tough choices with our staffing needs. And our employees are our family.”
Mark Murtagh, managing partner of Corvus Technology Solutions in Cranston – a service-disabled-veteran-owned software development company – said that IGT constitutes about a third of his business. Although he only has four Rhode Island employees, he sees the IGT contract proposal issue as one symbolic of a larger issue pertaining to Rhode Island’s business economy.
“Small veteran-owned businesses like mine count on strong, long-term relationships with larger companies. Too often in Rhode Island, we read more about big companies moving out of state or choosing to be somewhere else to begin with,” he said. “Gov. Raimondo and the legislature have an opportunity to continue that partnership for another 20 years, and they should, because it will help secure and strengthen the state’s small business community that counts on the work with companies like GTECH.”
Paul Hansen, founder and CEO of Millennium Consulting, spoke about the type of specialized technological work IGT performs for the state’s lottery and for its gaming centers at the two Twin River casinos. He said that going out to bid could hypothetically draw a proposal to offer the services for less money, but it would not match what IGT offers in quality.
“It’s unique technology, highly specialized technology,” Hansen said. “So to go out to bid perhaps might, in some cases, yield a lower offering in terms of the solution to this highly complex process, but certainly not the quality with which IGT can deliver it.”
Murray said that only Nevada-based Scientific Games – which Twin River has been attempting to court in order to wedge themselves in for a shot at securing a contract instead of IGT – and the Greek company Intralot could perform the same responsibilities that IGT performs, with one major difference between the three.
“You have the biggest [company] right here,” he said.
Murtagh echoed this same sentiment in response to a media inquiry asking how the business owners would feel if they saw a competitor secure a lucrative contract without any competitive bidding process.
“I wouldn’t be crazy about that, but I would tell you that you have to be qualified to bid on that contract, and like Paul said earlier, there’s not many companies that can handle this type of business,” he said. “As a result, if I had to partner with somebody else to fulfill that contract, I would be a little more understanding.”
“IGT is a global IT company,” he continued. “In the old days they were more of a hardware company – lottery machines – but it’s not like that anymore. It’s high tech, it’s mobile apps, it’s in the cloud. It’s not like you envision back going to the Cumberland Farms and buying your lottery ticket at the counter. It’s not like that. It’s extremely high tech and that’s the type of businesses we want based here in Rhode Island, not with a partner from across the country.”
Hansen said that in this situation, a no-bid contract negotiation made more sense than going out to bid.
“You want to make sure, quite frankly, that you have the best possible organization and the most experience to be able to manage this process,” he said. “As we all know, it’s a significant amount of revenue for the state that’s generated through these systems that IGT manages and develops. It’s not the kind of thing where you say, ‘OK, the lowest bid is where we should be going.’ Frankly, I would advocate for a no-bid contract or a no-bid agreement in this case precisely because of the unique nature of the work.”
According to a press release from Keeping Jobs in Rhode Island, citing an economic impact study from Dr. Edi Tebaldi at Bryant University, IGT’s presence in the state supports more than 2,400 Rhode Island jobs – 1,100 directly through employment and 2,400 indirectly through companies that do business with them. It states that IGT generates approximately $330 million in economic activity in the state each year.
Murray cited the impending loss of the Pawtucket Red Sox for Worcester in warning against the danger of potentially losing IGT without good reason.
“Losing the PawSox hurt. It hurt personally, it hurt our pride. Losing a business like IGT or Hasbro would put smaller Rhode Island businesses at risk, and their employees at risk,” he said. “We of course need the due diligence to vet this proposal, but let the facts speak for themselves. It’s a good proposal, it’s a fair process and it’s a pathway to the future of Rhode Island.”