[UPDATED STORY] GUAM. In a shock development, the Superior Court has voided A.B. Won Pat International Airport Authority’s 2012 Request for Proposals (RFP) for a speciality retailer, The Moodie Davitt Report can confirm. The Court has also set aside the awarding of the airport’s speciality retail concession to Lotte Duty Free Guam.
The story first broke in The Guam Daily Post, which revealed Superior Court Judge Arthur Barcinas’ ruling that the airport authority violated Guam’s procurement law during the 2012 RFP.
As reported, the concession was awarded to Lotte Duty Free Guam in 2013, replacing long-time incumbent DFS Group. The result has been the subject of a bitter legal feud involving both retailers and the airport authority ever since, after DFS challenged both the RFP process and the award.
In a remarkable decision issued Friday (and since obtained by The Moodie Davitt Report – from which we’ll bring you further analysis Monday), Judge Barcinas voided the airport’s RFP and set aside the concession agreement. DFS’s motion for summary judgment was granted. Lotte will be allowed to remain as the duty free concessionaire until the airport chooses a new retailer.
“The Court finds that the public interest will be best served if Lotte remains as the duty free concession operator until AIAA procures a new duty free concession operator” – Superior Court Judge Arthur Barcinas
“If AIAA [A.B. Won Pat International Airport Authority] wishes to issue another procurement for a duty free concession operator , the Court orders that AIAA do so in complete compliance with the procurement code and AIAA’s enabling statute,” the judge ruled. “With respect to Lotte’s operations at the airport, the Court recognises the difficulties AIAA and the Territory of Guam will face if the Court orders Lotte to vacate the retail space. Therefore the Court finds that the public interest will be best served if Lotte remains as the duty free concession operator until AIAA procures a new duty free concession operator.”
The Moodie Davitt Report has sought comment from all three parties involved in the hearing or (in Lotte Duty Free’s case) affected by the decision. DFS said it has no comment yet. We’ll bring you any response from the company to what is shaping as a significant vindication of its position on the tender process.
A Lotte Duty Free spokesman told The Moodie Davitt Report, “Lotte Duty Free has just received the Court’s decision. The decision is based on a technical argument that involves DFS and the airport.”
Lotte guaranteed the authority US$154 over the ten-year contract – the first five exclusive and the balance non-exclusive. The concession covers liquor & tobacco; perfume & cosmetics; fashion boutiques; accessories; watches; confectionery & packaged foods and destination merchandise, across over 24,076sq ft of retail space. Besides DFS, JR/Duty Free and The Shilla Duty Free also bid in 2012.
According to The Guam Daily Post, the Superior Court found that the airport had “committed multiple violations of law” involving the RFP.
Judge Barcinas said that the authority deprived DFS and, by extension, other bidders, “their right to a full and fair consideration of their proposals.” He ruled that the authority violated procurement law by not adopting legislatively mandated criteria, by using an incorrect method of source selection and by maintaining incomplete procurement records.
Judge Barcinas rejected the authority’s contention that its failure to adopt criteria was irrelevant to the 2012 RFP. “On the contrary, (their) failure to adopt the required criteria deprived all of the proposers the opportunity to have their bids reviewed in accordance with the legislature’s wishes,” he wrote.
