by Mindy Aguon

Guam - Negotiations for a multimillion dollar retail concessionaire contract at the Guam International Airport have been grounded as a protest was officially filed on Tuesday, raising concerns about the way the agency handled the procurement. Believing there were irregularities with the procurement process, DFS Group officially filed a protest with the Guam International Airport Authority over the awarding of the highly lucrative specialty retail concessionaire bid.

Earlier this month the airport board voted to award the concessions to Lotte DFS Guam. The decision came after a nearly six-month long process. DFS Group Chairman and CEO Philippe Schaus and COO Michael Schriver believe there were "unusual delays" with completing the award process and expressed concerns over the regularity and transparency associated with the process. In a press release, the two said the process took four months longer than anticipated due to several postponements acted by the GIAA on the grounds of procedural issues.

Schriver expressed concerns with the regularity and transparency of the process adding that DFS Group has enjoyed its shares of wins and losses in more than 50 years, but the experience with the retail concessionaire contract is "unprecedented". Schriver says the company has heard concerns since October of last year and believes that Guam's reputation as a place to invest for business may be tarnished by what he referred to as unusual proceedings.

He stated, "Through this protest, we seek to ensure that the bid process be fair and transparent, and that all the rules and laws governing the process be strictly adhered to. The value of transparency and an investment process that is free from undue influence is of paramount importance." DFS Group has been maintaining the contract at the airport for the last decade and have been on a month-to-month contract pending the award of the new ten year concessionaire contract.

GIAA executive manager Chuck Ada said, "We do respect any of the unsuccessful bidders to protest this award as we understand that there is tens of millions to gain and tens of millions to lose throughout the life of the contract, which is why we took the extra precautionary measures throughout the procurement process which unfortunately delayed the anticipated timelines for the award."

Ada stresses that the airport made every effort to protect the integrity of the procurement process and the agency is working to address all the items outlined in the protest. "It's unfortunate that the people's airport will continue to lose out on an increase in revenues until this process is resolved and a contract is executed," he noted.

As we reported, the protest means that negotiations with winning bidder, Lotte Guam DFS, have ceased until the matter has been resolved. As for DFS's claims that the procurement took too long, Ada responded, "There were concerns once the invitation to bid was closed. Concerns with gifts that were given to the board members, congressional delegate's letter as far as parity in procurement and the legislature's concern with regard to the airport's ability to engage a ten-year contract, those were all concerns for us during the initial part of the procurement."

Ada says the airport did not allow evaluators to engage in the evaluation process until those items were first addressed resulting in the delay of the award. Additionally, the airport took it a step further by randomly assigning letters to each of the company's so that evaluators wouldn't know which company submitted which bid. It's a point of contention also included in DFS Group's protest.

The airport will work on a response to the protest and based on that decision, DFS Group could then take their concerns to the public auditor and eventually to court if they aren't satisfied along the way.

Lotte's attorney, Cesar Cabot, told KUAM News that Lotte DFS believes that the airport has executed the concession retail RFP in a fair and impartial manner. Cabot adds the airport has exerted great effort in ensuring that the procurement evaluation process was conducted in strict accordance with Guam procurement laws.

In the end, he says, "We are confident that the airport's decision shall be upheld as fair, unbiased and in the best interest of Guam."