VIDEO: DFS Files Appeal With OPA and Lawsuit in Superior Court Over Airport Concession Contract Award

281

Guam – DFS Guam has filed a lawsuit in Superior Court and an appeal with the Office of Public Accountability over the manner in which the Guam International Airport Authority [GIAA] awarded the duty free concession contract.

DFS says they are protesting “the bias, lack of transparency and improprieties that ensued after the issuance of a Request for Proposal process for the duty free concession,”  according to a release issued by the company Thursday afternoon. 

READ the lawsuit filed by DFS in Superior Court HERE 

DFS lawyer Maurice M. Suh is quoted in the release as saying “We have serious grounds to believe that this proposal process was conducted in a way that violates the laws of Guam, government ethics regulations, and the specific requirements established for it.” 

READ the appeal filed with the OPA by DFS HERE

  

READ JR Duty Free’s protest HERE

On Saturday May 18th, GIAA announced that it had signed on contract with Lotte after rejecting DFS’s protest. Then last week Tuesday, May 21, GIAA informed DFS that it had 60-days from that date to vacate the duty free concession space its now occupies at the airport.

However DFS believes that its appeal to the OPA puts an automatic stay into effect and suspends that notice until the appeal process has been resolved.

As a result, DFS says that they have  “unilaterally committed to pay the higher guaranteed fees that the GIAA announced it would receive under a new contract – an additional $10.9 million annually – from July 14, 2013, the date that DFS was notified its tenancy will expire, until a new lease is validly enacted that is consistent with applicable law.”

Attorney Suh says that “DFS wishes to assure Guam and its people that DFS is only motivated by a desire to have this important decision be based on merit and legal process and nothing else. As a result, DFS has taken this unprecedented step to erase any doubt that it is motivated by personal financial concerns.”

READ the release from DFS below:

DFS Guam Challenges Airport Concession Proposal Process in Administrative Appeal and Lawsuit
For the Benefit of the People of Guam, DFS Volunteers to Pay $10.9 Million Difference in Minimum Annual Guarantee While Pursuing Its Legal Rights

Barrigada and Tamuning, Guam – May 31, 2013. DFS Guam LP filed a lawsuit in the Superior Court of Guam and a concurrent appeal yesterday to the Guam Office of Public Accountability relating to its protest of the bias, lack of transparency and improprieties that ensued after the issuance of a Request for Proposal process for the duty free concession at the A.B. Won Pat International Airport by the Guam International Airport Authority (GIAA).

“As one of the largest private employers on the island, DFS welcomes all improvements that can be brought to the airport and overall tourism in Guam,” said Michael Schriver, DFS’ Chief Operating Officer. “DFS believes that competition in the world of airport retailing is beneficial, and that bid processes like the one enacted by GIAA may result in the change of duty free operators. The lawsuit seeks to force the GIAA to behave fairly
and in accordance with applicable law in the award of this critical Airport Duty Free contract.”

“We have serious grounds to believe that this proposal process was conducted in a way that violates the laws of Guam, government ethics regulations, and the specific requirements established for it,” said Maurice M. Suh, a lawyer with Gibson, Dunn & Crutcher, who is counsel to DFS.

Currently, DFS operates the airport galleria at a fee which was agreed to by the GIAA a decade ago and which is substantially smaller than the new fee proposed by DFS and its industry competitors for the new lease of the airport. The legal actions undertaken by DFS in good faith may result in a postponement of the commencement of a new lease at the airport.

As such, DFS has unilaterally committed to pay the higher guaranteed fees that the GIAA announced it would receive under a new contract – an additional $10.9 million annually – from July 14, 2013, the date that DFS was notified its tenancy will expire, until a new lease is validly enacted that is consistent with applicable law. DFS thus is willing to ensure that the government of Guam and its citizens will suffer absolutely no loss of concession revenues as a result of DFS’ efforts to require GIAA to comply with its rules.

“DFS wishes to assure Guam and its people that DFS is only motivated by a desire to have this important decision be based on merit and legal process and nothing else. As a result, DFS has taken this unprecedented step to erase any doubt that it is motivated by personal financial concerns,” stated Maurice Suh. 

“Because DFS recognizes the importance of the increased revenues to the GIAA and the People of Guam, DFS is taking this positive step to proceed with ensuring that the RFP process was fair and transparent, without any detriment to the airport and the territory,” said Michael Schriver.

Schriver continued, “We hope that this matter will be settled soon through a full, open and impartial review of the facts. DFS remains fully committed to continuing its unwavering support and investments in the Guam tourism industry and our local community, as it has done for the last 30 years.”

 

Page 1

DFS Guam Challenges Airport Concession Proposal Process
in Administrative Appeal and Lawsuit

For the Benefit of the People of Guam, DFS Volunteers to Pay $10.9 Million
Difference in Minimum Annual Guarantee While Pursuing Its Legal Rights
Barrigada and Tamuning, Guam – May 31, 2013. DFS Guam LP filed a lawsuit in the
Superior Court of Guam and a concurrent appeal yesterday to the Guam Office of
Public Accountability relating to its protest of the bias, lack of transparency and
improprieties that ensued after the issuance of a Request for Proposal process for the
duty free concession at the A.B. Won Pat International Airport by the Guam
International Airport Authority (GIAA).
“As one of the largest private employers on the island, DFS welcomes all improvements
that can be brought to the airport and overall tourism in Guam,” said Michael Schriver,
DFS’ Chief Operating Officer. “DFS believes that competition in the world of airport
retailing is beneficial, and that bid processes like the one enacted by GIAA may result in
the change of duty free operators. The lawsuit seeks to force the GIAA to behave fairly
and in accordance with applicable law in the award of this critical Airport Duty Free
contract.”
“We have serious grounds to believe that this proposal process was conducted in a way
that violates the laws of Guam, government ethics regulations, and the specific
requirements established for it,” said Maurice M. Suh, a lawyer with Gibson, Dunn &
Crutcher, who is counsel to DFS.
Currently, DFS operates the airport galleria at a fee which was agreed to by the GIAA a
decade ago and which is substantially smaller than the new fee proposed by DFS and
its industry competitors for the new lease of the airport. The legal actions undertaken
by DFS in good faith may result in a postponement of the commencement of a new
lease at the airport.
As such, DFS has unilaterally committed to pay the higher guaranteed fees that the
GIAA announced it would receive under a new contract – an additional $10.9 million
annually – from July 14, 2013, the date that DFS was notified its tenancy will expire,
until a new lease is validly enacted that is consistent with applicable law. DFS thus is
willing to ensure that the government of Guam and its citizens will suffer absolutely no
loss of concession revenues as a result of DFS’ efforts to require GIAA to comply with
its rules.
“DFS wishes to assure Guam and its people that DFS is only motivated by a desire to
have this important decision be based on merit and legal process and nothing else. As
a result, DFS has taken this unprecedented step to erase any doubt that it is motivated
by personal financial concerns,” stated Maurice Suh.

2
“Because DFS recognizes the importance of the increased revenues to the GIAA and
the People of Guam, DFS is taking this positive step to proceed with ensuring that the
RFP process was fair and transparent, without any detriment to the airport and the
territory,” said Michael Schriver.
Schriver continued, “We hope that this matter will be settled soon through a full, open
and impartial review of the facts. DFS remains fully committed to continuing its
unwavering support and investments in the Guam tourism industry and our local
community, as it has done for the last 30 years.”