The District government apparently cannot award D.C. Lottery-related contracts without some major drama involving the much-maligned Certified Business Enterprise program.

When the city awarded the lucrative lotto contract in December 2009, the inspector general later found that the Department of Small and Local Business Development, which is tasked with administering the CBE program, erred in two ways. First, the IG found that the DSLBD had improperly denied certification as a CBE to a joint venture involving several well-connected politicos (including Mayor Vince Gray‘s campaign chairwoman Lorraine Green and convicted Gray campaign aide Howard Brooks). Second: the IG found that the DSLBD had improperly awarded CBE certification to a company run by Emmanual Bailey, a Maryland-based businessman who said the living room in his mother’s D.C. home was his company’s headquarters.

It was a key mistake. Had Bailey’s company, Veteran Services Corp., not been certified as a CBE, there’s a strong likelihood he wouldn’t have wound up winning the lottery contract.

Now comes Bailey, as first reported by the Washington Business Journal, saying that he might lose out on a seperate lotto contract to sell instant tickets because he says the DSLBD office did him wrong. Bailey says the DSLBD took way too long to process a request to certify a joint venture between his company and Pollard Holdings, a Canadian lotto company that wanted to bid on the instant ticket contract. That delay led the Office of the Chief Financial Officer, which awards lottery contracts, to disqualify Bailey’s bid earlier this month.

To add insult injury, DSLBD then denied certification for the joint venture a few days after OCFO rejected their bid. But after Bailey complained to the director of DSLBD, Harold Pettigrew, and others the agency changed course and certified the joint venture last week.

Bailey’s lawyer, Fred Cooke Jr., has so far not returned a call seeking comment. But in a protest filed with the D.C. Contract Appeals Board, he called DSLBD’s conduct “shameful.” A spokesman for DSLBD says the agency won’t comment because of the ongoing litigation.