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February 14. 2013 8:17PM

Liquor contract challenger loses first appeal

CONCORD ­- The second-place bidder on a lucrative warehouse contract with the state Liquor Commission has lost the first round in a two-step appeals process, even though the commission agrees it was the lowest-cost bidder.

Richard Gerrish, director of sales, marketing and distribution for the commission, on Feb. 11 denied a protest filed by XTL-NH, writing that, "XTL appears to have difficulty understanding the commission's request for proposals."

In November, the commission awarded the $200 million, 20-year contract to Exel of Westerville, Ohio, triggering Right to Know requests by the other two top bidders ­- XTL-NH and third-place Law Warehouses of Nashua. Law decided to forgo the formal protest with the Liquor Commission but is considering a lawsuit in Superior Court.

XTL-NH, through its attorney James Bianco of Concord, met a Liquor Commission deadline of Jan. 28 to file a formal protest. In his 18-page response, Gerrish writes that XTL failed to prove any objective errors in the Liquor Commission decision, and failed to understand the basic terms of the requests for proposals. XTL and Exel have until Feb. 19 to file additional information before the two commissioners issue a final decision.

Much of the XTL-NH appeal was based on parts of the Exel proposal that allegedly failed to meet the criteria of the initial request for proposals, including mandatory requirements. Gerrish replied that the request for proposals (RFP) "encouraged vendors to question its requirements and proposal alternatives."

He acknowledged that the RFP was modified several times, but asserted that the commission was within its rights in doing so. "It is fruitless to complain that the eventual contract is not a mirror of the RFP," he wrote. "A vendor was allowed to propose terms which the NHSLC was free to accept or reject."

XTL-NH offered the lowest-cost proposal for the first 30 months, approximately $500,000 less than Exel, Gerrish agreed. "The numbers have been identified and discussed," he wrote, "but the overall decision was a question of judgment. There was no objective error. ... Discretionary decisions are not subject to challenge.

"XTL submitted a commendable proposal. The differences between Exel and XTL are not great, but there are differences. Exel provided a better overall solution and a better IT solution."

dsolomon@unionleader.com

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