Liquor bidders likely to get appeal hearing

AUGUSTA – Two unsuccessful bidders competing for a $125 million wholesale liquor contract likely will be approved later this week for an appeal hearing.

“Everybody wants this to be heard as quickly as possible,” Elaine Clark, director of the state Bureau of General Services, said Tuesday.

Maine Liquors of Augusta and MaineCentric of Auburn are appealing the state’s decision to award a 10-year lease for liquor distribution rights in Maine to Martignetti Cos. of Norwood, Mass. Maine Liquors alleges that because of irregularities in the state’s request-for-proposals selection process, Martignetti gained an unfair advantage over other bidders.

Critics of the contract award argue that the deal of $125 million plus royalties was not a good one because the state received about $26 million a year from its operation of the wholesale liquor business, which adds up to about $260 million over the 10-year life of the lease.

The Legislature agreed last year to privatize the state’s wholesale liquor business at Baldacci’s request. That allowed the state to book the extra $125 million in the current budget cycle, helping to balance the books in the face of a $1.2 billion budget shortfall.

The 37-page appeal alleges the state allowed Martignetti to amend its proposal in violation of state rules. The Augusta firm also charges Martignetti failed to meet all the state’s requirements and that Maine Liquors filed a stronger proposal with better references than Martignetti.

The other losing bidder, MaineCentric, alleged the state “badly miscalculated” the amount of royalty payments it would receive under its proposal and “unfairly misjudged” the strength of the Auburn company’s operational plan.

“We offered the state the best deal,” Todd Prawer, chief executive officer of MaineCentric, said in a prepared statement.

Clark said she expected to determine this week whether both of the losing bidders are eligible to submit an appeal to the state. Although that decision had not been made Tuesday, Clark indicated the two parties only needed to prove that they had failed to win the contract to be considered “aggrieved” and thereby qualify for a hearing.

The state then will establish a hearing date for a special four-member panel whose membership will be determined by Rebecca Wyke, state Department of Administrative and Financial Services commissioner. Clark is required by law to be one member of the committee with two other appointees approved by Wyke or her designee. The committee will review the bidders’ complaints and an assistant state attorney general will serve as presiding officer during the hearing to address legal issues as they arise.

Upon conclusion of the appellants’ presentations, the appeal committee can make one of two findings.

“They can either validate the contract award or invalidate the award and that decision is appealable to Superior Court,” Clark said.

Under Maine law, a determination on the bidders’ complaints must be made within 60 days. The state’s deadline for approving a final contract for privatization of the liquor business is March 19.