The Hawaii Visitors and Convention Bureau is alleging that the Hawaii Tourism Authority violated state procurement law by running an unfair process that predetermined that re-solicitation for its largest piece of business, the U.S. brand management and global support services contract, should go to the Council for Native Hawaiian Advancement.

HVCB’s protest, which was filed June 21, was released to the Honolulu Star-Advertiser by HTA on July 20 after the newspaper filed an appeal challenging the agency’s original decision to deny access to the public record.

HTA on Dec. 10 awarded HVCB a multiyear U.S. tourism contract worth $22.5 million the first year but rescinded it after the Council for Native Hawaiian Advancement issued a formal protest.

On June 2, HTA awarded a multiyear U.S. tourism award to CNHA worth more than $34 million during the first two years.

The 68-page protest, signed by HVCB President and CEO John Monahan, has asked HTA to rescind its award to CNHA and award the re-solicited U.S. brand management and global support services contract to HVCB.

It seeks reimbursement for attorneys’ fees in connection with the bid protest and costs incurred in response to the original and re-solicited request for proposals.

Monahan declined to comment.

HVCB’s protest questioned whether the reasons given by HTA to rescind HVCB’s original award “were pretext, and that it had been predetermined that the contract should be awarded to CNHA.”

It also alleged that the “procurement process failed to afford HVCB an equal opportunity to compete in a fair and open environment.”

Some of HVCB’s key arguments:

>> HVCB questioned HTA’s decision to restructure the scoring categories during the revised RFP and to change members of the evaluation committee.

David Arakawa, George Kam, Kalani Ka‘ana‘ana and Mahina Pai­shon-Duarte returned to serve on the evaluation committee during the revised RFP; however, Karen Hughes, Laci Goshi and Maka Casson-Fisher did not. HTA also added Davis Yogi, John Morgan, Nalani Brun and Iwilani Kaho‘ohanohano.

HVCB noted that Kaho‘ohanohano had worked for Hawaiian Airlines under Ann Botticelli, who was listed by CNHA as executive director of its tourism-related Kilohana Collective in its first proposal and as a member of its transition team in the second proposal.

>> HVCB alleged that CNHA made “misrepresentations and misleading statements” in its proposal and was not a “responsible offeror.”

Under Hawaii state procurement law, the procurement officer must determine that the “prospective offer or has the financial ability, resources, skills, capability, and business integrity necessary to perform the work.”

HVCB’s protest included a legal document from Hawaii Hotel Alliance President Jerry Gibson disavowing that he had agreed to be identified in the revised solicitation as part of CNHA’s transition team.

HVCB argued that CNHA has improperly added new transition team members although state procurement law precludes revisions after a proposal has been scored and while a protest is pending.

>> HVCB contends that the evaluation committee conducted scoring in a capricious and arbitrary manner. HVCB said the evaluation committee should not have allowed optional oral presentations since the re-solicited RFP required an average score of 80 to advance to round two, and neither applicant had achieved that threshold.

HVCB said the committee should have selected HVCB’s proposal at round 1, given that its average written score was 79.89 out of 100, compared with 77.5 for CNHA. The average score among the committee members for HVCB in the second round was 77.51 out of 100 and was 90.5 for CNHA.

HVCB questioned round 2 scores given that the RFP required that “the new scores will reflect the offerors’ overall performances in the first and second round.”

>> HVCB alleged that CNHA gained an unfair advantage because HTA provided CNHA with HVCB’s proposal at a Dec. 14 debriefing.

HVCB said the State Procurement Office sent HTA an email Jan. 4 advising HTA that it should not have given HVCB’s proposal to CNHA and instructing it to “level the playing field” by providing HVCB with CNHA’s proposal and bid protest.

HVCB said it did not receive CNHA’s proposal until Jan. 14 or its protest until Jan. 17. HVCB said the delay deprived it of the “opportunity to file any protest or otherwise take action.”

HVCB said by the time it got the information, HTA already had canceled its original award.

>> HVCB alleged that the timing and circumstances surrounding the rescission of HVCB’s original award and the issuance of a re-solicited RFP suggest that “perhaps this was not an open procurement, and that the contract awardee had been predetermined at the onset.”

The protest refers to an exchange between House Budget Committee Chair Sylvia Luke and HTA President and CEO John De Fries and Ka‘ana‘ana, the HTA chief brand officer, during a Jan. 5 budget informational briefing. HVCB noted that Luke said “she found it ‘troubling’ that HTA awarded the RFP to incumbent HVCB and expressing skepticism whether HTA could actually improve destination management.”

HVCB’s protest alleges that this exchange appears “to insinuate that because HVCB has historically held the contract, which in part focused on branding initiatives drawing visitors to Hawaii, perhaps HTA should award the contract to a different firm.”

CNHA President and CEO Kuhio Lewis said in a statement Sunday: “We respect the process that HTA must follow and are confident in the process they underwent. As part of that process, we will be submitting factual information to the state to clarify the various misrepresentations and inaccuracies presented in the protest.

“Mahalo to the HTA board and staff for their confidence in CNHA and the Kilohana Collective team. Mahalo to our kupuna who taught us that Hawaii has the key to world peace, aloha. It is in that spirit that we eagerly look forward to working with all stakeholders, including HVCB.”

Prior to releasing HVCB’s protest documents to the Star-Advertiser, HTA heavily redacted its contents. When questioned by the Star- Advertiser on the redaction, HTA Chief Administrative Officer Keith Regan said in an email that after consultation with the state Office of Information Practices and its legal counsel, HTA determined that “certain bid-related information should be withheld from disclosure until a procurement is finished so as not to give anyone an unfair advantage due to knowledge of past or future proposal information being revealed.”

Regan said since the current protest could result in another procurement, the “more conservative route was to redact that information (but only that information) dealing directly with the contents of the bidders’ proposals. All other information, including the legal analysis and complaints of the protestor, and the protestor’s analysis of the nature of the opponent’s bid(s), remains disclosed.”

However, HTA already has released the revised RFP proposals to HVCB, CNHA and the Star-Advertiser.

State law requires that Mike McCartney, director of the state Department of Business, Economic Development and Tourism, in his role as head of the purchasing agency, resolve HVCB’s protest “as expeditiously as possible.”

He has the authority through Hawaii Revised Statutes Chapter 103D, the Hawaii public procurement code, to attempt to resolve the protest by mutual agreement or to make a decision to uphold or deny the protest.

If McCartney denies HVCB’s protest, the bureau may pursue an administrative review, where it may call witnesses to testify.

McCartney said Saturday in an email to the Star- Advertiser, “I am doing a comprehensive review of all points in the protest and will respond to them fairly in due time. Until then I must respectfully refrain from commenting on this ongoing process until it is complete.”

Meanwhile, De Fries, the HTA president and CEO; HTA Public Affairs Officer T. Ilihia Gionson; and HTA Board Chair George Kam were participants in tourism panels during CNHA’s annual conference held July 19-22.

When the Star-Advertiser asked why HTA officials participated in CNHA’s conference in the midst of the protest period, Gionson said in a statement, “Engaging in community events is an important part of our work. HTA leadership participated in this year’s convention, as we have in years past, to discuss HTA’s work to manage tourism and educate visitors while representing The Hawaiian Islands around the world.”

The protest remains unresolved more than a month after it was filed by HVCB, whose U.S. tourism contract extension expires in September. In contrast, McCartney resolved CNHA’s Dec. 17 protest during the original RFP in fewer than 10 business days.

CNHA’s 14-page protest, pertaining to HTA’s original solicitation for the U.S. contract, alleged that evaluation committee member Karen Hughes gave it a low outlier score, which it said skewed the results by nullifying the scores of five committee members. CNHA also alleged that Hughes was biased because she had previously worked for HVCB.

According to public records obtained by the Star-Advertiser, McCartney said in a Dec. 30 letter to CNHA’s Lewis, “HTA will solicit a new RFP with clarified requirements, associated evaluation criteria, scoring methodology, and requirements around funding and reporting aligning with the American Rescue Plan funding source, which is in the best interest of the state of Hawaii.”

HVCB protest letter and exhibits by Honolulu Star-Advertiser on Scribd

First supplemental to HVCB bid protest by Honolulu Star-Advertiser on Scribd