Lottery Delay Limited Bids, Firm Claims : Contracts: Computer company tells hearing that state officials were slow in issuing project specifications, giving only the current contractor time to meet the deadline.

A computer company charged Friday that it was unable to compete for a $500-million state lottery contract because officials dragged their feet in designing the specifications for the project.

Richard Martland, an attorney for Automated Wagering International, told a special audit panel that the delays then forced lottery officials to establish such a short deadline for completing the project that only its current contractor could meet the timetable.

Martland presented his testimony during a daylong hearing conducted by a special audit team to examine the lottery’s bid-asking procedures for contracts to run its computerized games of chance. The team was appointed by Gov. Pete Wilson after the Rhode Island-based GTECH company submitted the only bid for the project.

The four-member panel is expected to complete its work next week.

GTECH officials, commenting for the first time on the AWI accusations, said the New Jersey-based company and other rivals were complaining about the bidding procedures only because they wanted to buy time for themselves.

GTECH President Guy Snowden said AWI and other companies declined to bid on the contract because they had neither the financial resources nor the technical capabilities to handle the project.

If they are successful in throwing out the bid, he said, they would then gain time to better prepare themselves to handle a project requiring the replacement of California’s computer mainframes and installation of 13,000 terminals.

But Martland argued that the six months the lottery had allowed to complete the project was not enough time for any company that would have to start an operation in California from scratch. He said GTECH had an advantage because it had a work force and equipment in place.

He said the lottery could have initiated the bidding process earlier so there would be more time to complete the project. Instead, he said, it waited until January to release the specifications. With GTECH’s contract expiring Oct. 14, he said, that meant there was very little time for a new computer system to be installed.