HELENA -- The Montana Lottery signed a contract Tuesday with a Georgia computer systems and lottery equipment vendor that it says will save the state $13.9 million over the next seven years.

"This is exactly the kind of savings I have asked all directors to find within their departments," Gov. Brian Schweitzer said. "This is just the tip of the iceberg for making state government more efficient."

The state Lottery Commission on Sept. 28 unanimously recommended the state select Intralot USA of Duluth, Ga., to supply Montana with some 625 lottery terminals, an on-line system, a mainframe computer and other computer systems to run lottery transactions in the state starting March 31, 2006.

That recommendation came after Intralot USA scored highest in the state's evaluation of the proposals submitted by three companies: Scientific Games International of Alpharetta, Ga., which has the current contract that expires March 30, 2006; GTECH of West Greenwich, R.I., and Intralot.

Scientific Games and Intralot USA had nearly the same scores in the technical evaluation of the systems, excluding price, said George Parisot, Montana Lottery director.

But he said Intralot proposed the lowest charge to the state per lottery transaction such as a ticket purchases at 5.85 percent, compared with GTECH's bid of 6.599 percent and Scientific Games' 6.6 percent. The state's current contract with Scientific Games is for 8.35 percent.

The Lottery earns about $8 million a year for state coffers, on gross annual sales of about $35 million.

Under the new contract, Intralot will receive 5.85 cents out of every $1 ticket sold.

Parisot said that is projected to save $6.8 million over the seven-year contract.

The remaining $7.1 million in savings comes in equipment costs, Parisot said. Under the current contract, the Lottery purchased all the equipment, but under the new deal, the equipment is included in the base price.

It was uncertain Tuesday whether the unsuccessful bidders would challenge the state's award of the contract to Intralot. Parisot said he has had no indication yet.

Challenges to state lottery contract awards are not uncommon. When Scientific Games won the current Montana Lottery contract, a losing bidder filed an unsuccessful appeal.

Intralot has a similar lottery contract with just one other state -- Nebraska. Parisot said the team evaluating the bids traveled to Nebraska in mid-September and heard "nothing but praise" about Intralot from Nebraska Lottery officials.

Intralot USA is a U.S.-based company that is part of a Greek-based Intralot, which has 33 subsidiaries and more than 1,800 employees in 32 countries. It supplies lottery equipment all over the world, Parisot said.

The company is expected to spend money in Montana by hiring staff, buying vehicles and equipment and staying in hotels, he said.

The conversion provides Montana with a chance to reinvent its lottery, with Montanans seeing "a drastic transformation" with a number of changes for the benefit of retailers and players, Parisot said.

The Montana Lottery, created by a 1986 referendum, sold 33 million tickets of all kinds, in fiscal 2005, including Powerball, Montana Cash and other games, including scratch-off tickets. Parisot said Montana Lottery ticket sales dropped from the 36 million tickets in fiscal 2004 because there weren't as many high Powerball jackpots, a step officials have rectified.