A.B. Won Pat International Airport Authority, Guam

It has been over three years since Lotte Duty Free Guam (Lotte) was awarded the specialty retail concession at the Antonio B. Won Pat International Airport, Guam in a fair, open, and competitive procurement. DFS Guam LP (DFS), which held the exclusive contract for over 40 years, came in third in the procurement process.

The Lotte contract now pays the Airport Authority (GIAA) $15.4 million annually - more than double the amount that DFS paid under the previous contract. In addition, Lotte has made more than $20 million in improvements at the Airport and the Latte contract was a key factor in the Airport securing $247 million in long term financing for necessary Airport improvements such as the new third floor arrivals corridor to be constructed later this year.

"For the last three years, DFS has refused to accept the fact that they lost to a significantly better proposal from Lotte and have subjected the Airport and the people of Guam to an unending series of wrong-headed protests and lawsuits," said Chuck Ada, Executive Manager of GIAA. "Of course, DFS is unhappy it lost a contract it held exclusively without competition for decades which yielded tens of millions of dollars in profits for DFS. Plain and simple, the Lotte contract is better for the Airport and the people of Guam."

Ada went on to say, "Recent statements by DFS attorneys about legal fees relating to the specialty retail concession contract are yet another cynical attempt by DFS to the distort the facts and cast a cloud over an agreement that continues to pay dividends for the people of Guam."

"Obviously, DFS would like the Airport not to be able to fight back and defend the specialty retail contract. The Airport cannot compete with DFS's deep pockets. However, we have an indemnification clause in the Lotte contract covering legal fees and costs for any disputes that may arise," said Ada. "From the moment it lost the contract, DFS has tried to overwhelm the Airport with treats and litigation. DFS has hired four law firms in its attack on the Airport, including one of the largest law firms in the world. The amount of legal fees incurred in regard to the Lotte contract is a direct result of the relentless attacks by DFS. Without the indemnification agreement in the Lotte contract it would have been difficult for GIAA to afford to stand up to DFS. GIAA will continue to fight hard to defend the Lotte contract because it is clearly the best deal for the people of Guam and the traveling public."

In compliance with Guam procurement law, GIAA thoroughly investigated all three DFS protests in a timely way and denied all three claims. "We have been over the same ground for three years now and despite millions of dollars spent by DFS on legal fees to drag the Airport through the courts, we're right back where we started," said Ada. "Instead of accepting the result of submitting an inferior proposal in a businesslike way, they have taken the concept of sore loser to a whole new level. It's interesting that our sister airport in Saipan has also decided to put out to bid their specialty retail concession space. I just hope that DFS does not react the same way if they lose again."

GIAA recently requested that Guam Attorney General Elizabeth Barrett-Anderson intervene in GIAA's ongoing disputes with DFS and the agency is hopeful that the Attorney General will support GIAA's efforts to bring the litigation to a speedy end in the best interests of the Territory and the people of Guam.

"The Airport, which recently celebrated its 40^th anniversary and was awarded a perfect score by the FAA in our most recent annual certification inspection, which was not only a first for our airport, but in the entire Pacific region. We also received a clean audit in our latest annual financial review by the Office of the Public Auditor, which places us on low risk auditee status, attainable with three consecutive years of no findings. Most importantly, Guam's Airport is a world class facility that is financially stronger than it has ever been, based in great measure on the revenue produced by the Lotte contract," concluded Ada.