In an op-ed piece in the Bangor Daily News (“Privatization of Maine’s liquor business ‘fair and open’ process,” March 15), Commissioner Rebecca Wyke, of the Department of Administrative and Financial Services, has gone on record defending the administration’s process for privatizing the wholesale liquor business. While I have respect for Commissioner Wyke, her assertions cannot go unchallenged. The entire bid process was far from “fair and open,” as she contends. The process was filled with errors.
Commissioner Wyke has written, “No bidder can lay claim to being more of a Maine company than another.” She should tell that to the more than 500 Maine workers who have been employed at Pine State Trading for decades. Pine State has been a Maine company for 65 years. In contrast, Martignetti, the company Wyke’s department selected to run the wholesale liquor business in Maine, was created the day before the bids were due. One day vs. 65 years, you can decide who can lay claim to being a Maine company.
This is apparently the kind of logic that pervaded the scoring process that her department oversaw. Both companies are technically Maine companies but common sense allows us to draw a clear distinction between a longtime, family-run Maine business and an out-of-state business looking to cash in on a lucrative Maine contract.
Consider the quality-of-service issue, e.g. tailgate vs. in-store delivery. Ask the customer which is the preferred service. Yet, according to the department’s scoring system, both companies received equal points for service. Consider the references; Pine State had positive references from 50 stores and suppliers across Maine. Martignetti had a mere eight references, all from out of state, yet Martignetti scored four to Pine State’s five points.
There were other glaring flaws in the scoring process. The bids were not scored in the same manner advertised in the request for proposals. Martignetti was clearly allowed to dramatically enhance its bid after the deadline. It added critical information left out of its original bid regarding how it would transition from public to private distribution of liquor.
The department broke at least two laws during the selection process. Richard Thompson, who works for Wyke and is the state’s chief information officer, admitted under oath that the department violated state law because it did not write rules related to the wholesale liquor contract prior to accepting bids. Wyke contends that the state has existing laws that govern the awarding of contracts. But the Legislature specifically instructed the department to write laws specific to this contract. In the other instance, Wyke herself admitted, under oath, that the Legislature was not kept informed of meetings as was required by the legislation authorizing the contract.
Perhaps Wyke’s most astonishing claim is that the process prevented the bid from going to the “person with the best political connections.” The consultants to Martignetti are without question very well connected, not just to state government in general but to the individual members of the selection committee. Kay Rand and Larry Benoit are both former chiefs of staff. Rand ran Angus King’s administration and Benoit was chief of staff to John Baldacci before he was elected governor.
Most of the members of the selection committee have close ties to one or both of them. Benoit coordinated the transition from the King administration to the Baldacci administration including recommending appointments to various departments. For Wyke to suggest that the company with the greatest political connections did not win the bid simply does not pass the straight-face test.
Why does any of this matter? Why should Maine’s leaders worry about sending business out of state? Because Pine State already employs 500 people in Maine, and would hire an additional 44 employees in Maine. Because Pine State has a network of local suppliers and stores to efficiently run the contract. Martignetti will have to attempt to create a parallel network. But most importantly, once again, we are sending the message that the state government is not on the side of Maine business. We know this is not Gov. Baldacci’s intent. The government should be in the business of encouraging new industries to come to Maine, not merely new businesses to compete with businesses already here.
Finally, Wyke points out the appeals board rejected all the claims and upheld the Martignetti award. That is not surprising when you consider that the appeals board was hand-picked by the administration. During the appeals process, Rand made it clear that Martignetti would not pay the required upfront fee of $125 million for the contract if the appeal were upheld. (That makes good business sense; no company would pay a fee without a contract in place.)
Much of that money is in the governor’s budget for this fiscal year; essentially, that money is helping balance the budget. The members of the committee, all bureau chiefs with budgetary responsibilities, clearly got the message; if the budget were to be slashed because the fee was not paid, how much would their own bureaus have to cut?
It is not too late. According to the original request for proposals (RFP), the administration can stop the process any time before a contract is signed. Wyke has not yet signed a contract with Martignetti. This is also an opportunity for the state to look at the current RFP and make any changes to ensure the best possible deal for the people of Maine. We strongly urge the governor and commissioner to reopen the process without the necessity of a court battle. The people of Maine deserve a truly open and fair process.
Charlie Canning is the chief executive officer of Pine State Trading Co.
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