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March 18. 2013 6:25PM

Another losing bidder joins legal fray over liquor contract

CONCORD - Another unsuccessful bidder for a 20-year, $200-million warehouse contract with the New Hampshire Liquor Commission is taking the commission to court.

Concord attorney James Bianco on March 12 filed a petition in Merrimack County Superior Court on behalf of XTL-NH, the Pennsylvania-based logistics firm that placed second in the NHLC bid scoring, but had the lowest-priced bid.

The petition names both the NHLC and Exel, Inc., of Westerville, Ohio, the company that won the contract in November. It claims the NHLC showed favoritism to Exel by modifying the request for proposals to such an extent that the final contract looks more like Exel's proposal than the liquor commission's RFP.

Bianco's petition repeats some of the same arguments made in a February lawsuit filed by Law Warehouses, the third-place bidder, in Hillsborough County Superior Court South. But while Law seeks to have the Exel contract overturned and re-bid, Bianco argues the court should nullify the Exel contract and grant the bid to XTL-NH.

The commission, which has already spent nearly $300,000 on outside counsel defending its contract decision, will now be facing court battles in Concord against XTL-NH and in Nashua against Law Warehouses, which has done warehousing work for the commission since the 1970s.

Assistant Attorney General Lisa English, who has defended the commission in right to know petitions filed by Law Warehouses, would not comment on the latest lawsuit, except to say, "The liquor commission acted properly and within its discretion in awarding the contract to the winning bidder."

The XTL-NH petition accuses the liquor commission of improperly entering into an "open-ended contract" with Exel that violates the RFP's mandatory requirements and places the state at significant risk.

Bianco also maintains that Exel should have been disqualified due to "its recent history of willful workplace safety, health and wage violations as a warehouse operator."

He writes that the commission investigated a 1983 allegation of mail fraud against XTL, which turned out to be levied against an entirely different company, Xpress Truck Lines, but ignored or failed to uncover a Feb. 21, 2012, citation by the Occupational Safety and Health Administration against Exel.

OSHA ruled that Exel failed to report 42 serious injuries at one of its warehouses over a four-year period, and was fined $143,000. In addition, the Department of Labor collected $213,000 in fines from Exel and two other companies for minimum wage violations at a Palmyra, PA, facility managed by Exel.

While the liquor commission thoroughly discussed the 1983 allegation against XTL, Bianco writes, "there does not seem to be any evidence of similar due diligence into the investigation of Exel's background as a warehouse operator ... even though this information could be easily found through a simple Internet search."

Bianco attached articles from the New Hampshire Union Leader on the Exel violations in Pennsylvania as exhibits to his petition.

The petition also argues that the contract with Exel is improper because the governor and Executive Council did not review and approve the contract, as required under New Hampshire law. "While it appears the NHLC has taken the position that the 20-year warehousing services contract was not subject to the review and approval of the Governor and Executive Council, this position is erroneous."

Attorney General Michael Delaney has argued before the Executive Council that the Liquor Commission Modernization Act passed in 2009 exempts NHLC contracts from council review. Lawmakers have filed a bill that would clear up any confusion by asserting governor and Executive Council control over such contracts in the future.


dsolomon@unionleader.com


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