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Liquor warehouse contract spurs public access legislation

New Hampshire Union Leader

February 14. 2013 8:17PM

CONCORD ­- Controversy surrounding a $200 million warehousing contract awarded to an Ohio-based firm by the state liquor commission has spawned legislation that sponsors say would improve oversight and expand public access to similar contracts in the future.

Even though they missed the deadline for the current legislative session, a group of lawmakers convinced the House Rules Committee to allow the bill to be filed next week. It would restore Executive Council review over any contract worth more than $10,000 and would strengthen the state's Right to Know Law to make clear that a contract with the state becomes a public document once it's signed, according to one of the bill's sponsors, Peterborough Democrat Peter Leishman.

"We're just a little concerned about the lack of transparency in the whole process," Leishman said. "There has been a lot of controversy surrounding the award of this contract, a lot of which stems from so much stuff being redacted."

Leishman said the House Rules Committee accepted the draft legislation on Feb. 8, and the Office of Legislative Services is working on the final wording. Other cosponsors include Nashua Democrats David Campbell, Mary Nelson and Cindy Rosenwald, and Hudson Republican Lynne Ober.

Ober was chairman of a committee appointed last year to investigate a number of allegations against the liquor commission, including lobbying activities and irregularities in the bidding process for the liquor warehouse contract with Exel Inc. The Special House Committee to Evaluate the New Hampshire State Liquor Commission issued its report in November, and recommended several changes in how the commission operates. One recommendation was to bring budget and contract control back to state lawmakers and the Executive Council.

The Liquor Commissioner Modernization Act of 2009 removed many of those controls in hopes of creating a more flexible organization that could respond to market demands and make the state more money. Attorney General Michael Delaney interpreted the legislation as removing NHLC contracts from governor and Executive Council review, although others involved with the legislation have disagreed with that interpretation.

Law Warehouses of Nashua has done the warehousing and trucking work for the commission since the 1970s, and was among the bidders for the 20-year contract awarded in November to Exel Inc. of Westerville, Ohio, a wholly-owned subsidiary of the German firm, Deutsche Post DHL.

Law, the third-place bidder, filed a Right to Know petition in superior court to obtain details on why Exel was chosen by the commission's evaluation committee, arguing that once the contract was approved it became a public document. Although a lot of material was released, many pages were still blacked out or redacted and Law lost its appeal to obtain the redacted material. The company is now considering a civil suit against the NHLC in superior court.

The second-placed bidder, XTL-NH, with corporate headquarters in Pennsylvania, filed a formal protest with the commission, which was denied on Feb. 11 (see related story). XTL was also frustrated in its attempts to obtain documents through various Right to Know requests in November and December, according to its attorney, James Bianco of Concord.

Seeking full disclosure

Both Law and XTL-NH maintained that the request for proposals and bidding process favored Exel's proposal, and that full disclosure of all the documents related to the request for proposals, scoring sheets and final contract could possibly prove or disprove their case.

Four of five Executive Council members last week expressed an interest in holding hearings on the contract process, but were dissuaded by the attorney general, who stood by his ruling that the NHLC is exempted from Executive Council oversight by the 2009 legislation.

"It shouldn't take court action to start opening the window and looking at all the contents of that contract," Leishman said. "We're hoping we can return to the days when things were a little more transparent. It won't have an impact on the current situation, but certainly if the liquor commission wants to fully disclose what's in that contract, that's up to them."

Craig Bulkley, chief of administration for the liquor commission, said it would be premature to comment on the legislation until he sees it. "At that point, we'll have a better sense of what these particular lawmakers are suggesting," he said.

The late-filed legislation was initially proposed as two bills - one regarding contract review and the other enhancing the state's Right to Know Law as it applies to state contracts. After consulting with attorneys in the Office of Legislative Services, Ober said lawmakers agreed to consolidate both objectives under one bill.

"I don't quite understand how we got into a situation like this," she said. "I don't think anyone wants the kind of unfavorable scrutiny and conversations we've been having over this contract. We can't leave people wondering if something was done behind the scenes."

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