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A.B. Won Pat International Airport Authority, Guam

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DFS Protest Denied

Thursday, May 23, 2013

The A.B. Won Pat International Airport Authority, Guam (“GIAA”) announced today that after a thorough review and investigation it has denied a protest filed by DFS Guam L.P. relating to the Airport specialty retail concession (the “duty free concession”).

On July 12, 2012, GIAA issued an RFP for the duty free concession at the Airport’s main passenger terminal. DFS has held the lucrative duty free concession on an exclusive basis for over 30 years.

For the first time the duty free concession award was a competitive process. In the past DFS was the only proposer. This time there were four proposals submitted and evaluated. GIAA Executive Manager Chuck Ada stated “we wanted to make sure the process was as competitive as possible so that we could secure the most beneficial deal for the Airport and the People of Guam.” Ada went on to say ” we feel strongly that the more competition there was the better deal we could negotiate.”

The Airport evaluation committee engaged in a fair and deliberative process that resulted in ranking of the four proposers based on well-defined evaluation criteria contained in the RFP. And, GIAA instituted a procedure for the GIAA Board’s consideration and vote on the ranking results that maintained the integrity and fairness of the competitive proposal process.

On April 12, 2013 after an extensive evaluation process, the GIAA Board unanimously approved Lotte Duty Free Guam, LLC as the most qualified proposer of the four companies submitting proposals.

Although DFS was not ranked second, on April 23, 2013 DFS submitted its protest to GIAA, demanding that Lotte’s proposal be disqualified.

Upon a careful and extensive investigation of the alleged facts in DFS’s protest, GIAA has determined that DFS’s allegations are mostly based on speculation and innuendo that do not support a determination that Lotte is n non-responsible proposer requiring its disqualification. Executive Manager Ada stated, “GIAA has determined that there is no merit to DFS’s allegations that Lotte is a non-responsible proposer and that its proposal should be deemed non-responsive and disqualified.” Ada further stated “we are confident that our Evaluation Committee’s unanimous rankings, and the Board’s unanimous approval, of Lotte as the top proposer was the correct decision, and our subsequent review and investigation in connection with the DFS protest confirmed that determination.”

GIAA also concluded that DFS’s protest is untimely. DFS first knew about the events that form the basis of its protest on October 1, 2012 yet waited until after the best qualified proposer was announced to protest the alleged improper conduct by Lotte that DFS knew about six moths prior.

Executive Manager Ada indicated that GIAA looks forward to negotiating and consummating the new duty free concession contract as soon as possible. Ada stated “I anticipate that the new contract will result in additional substantial economic benefits to the Airport in the very near term.”