Lawsuit seeks to stop Managaha concession deal

A losing bidder is suing to stop the Managaha Island concession deal between the Department of Public Lands and Triple J.

U-Top Investment (Saipan) Inc., through counsel Robert T. Torres, asked the Superior Court to declare DPL’s award of the Managaha concession deal to Triple J as unlawful and to set it aside.

The lawsuit also seeks a court injunction against DPL Secretary Marianne Concepcion-Teregeyo from awarding the concession agreement.

Judge Joseph N. Camacho set a status conference on April 16, at 1:30pm.

All Superior Court judges, except Camacho, recused from presiding over the case.

Teregeyo, DPL, and the CNMI government, through the Office of the Attorney General, sought to have the lawsuit dismissed.

Assistant attorney general Kastle Lund-Turner argued that U-Top does not have a standing to raise a claim, the suit deprives the court of jurisdiction, and that the company “fails to state a claim on which relief can be granted.”

In U-Top’s complaint, Torres asked the court to declare that DPL’s and/or Teregeyo’s failure to have an administrative procedure for addressing disputes violates a law.

Torres asked the court to declare that any award using the request for proposal in this case, as applied by DPL, would be unlawful.

“Can DPL do whatever it wants with public land however it wants to? No,” said Torres, citing precedent that states that “DPL is specifically not empowered to act within the free market without restriction.”

Yet, Torres said, in seeking out a new concession agreement for Managaha, DPL claimed to be a market participant, failed to follow its own law, and even refused to say what law it was following.

DPL solicited proposals in June 2018 for a Managaha Island master concession operator through a request for proposals.

U-TOP and Triple J submitted a proposal. On Jan. 24, 2019, DPL informed U-Top that the company lost the bid.

Torres said the DPL notice—a letter—did not inform U-Top if any award had been made and why U-Top was not awarded the deal.

Torres said that, on behalf of U-Top, he wrote to Teregeyo last Jan. 29 protesting U-Top’s loss.

He also requested records about the process followed by DPL in its non-award to U-Top and award to Triple J, score sheets and notes from the individual evaluators.

Torres said Teregeyo responded by letter last Feb. 8, notifying him that materials responsive to U-Top’s request were available for inspection and copying.

Torres said Teregeyo also stated that U-Top’s protest will be addressed separately at a latter date but she was silent as to the DPL procedure on how to address the protest.

The lawyer said that last Feb. 14, Teregeyo wrote a letter to him responding to U-Top’s protest for non-award. He said Teregeyo asserted that DPL did not act as a regulatory body in issuing the RFP and that DPL was not engaged in procurement.

Torres said Teregeyo’s Feb. 14 letter states that “both proposals were evaluated using the same evaluation methodology and instruments.”

Torres said the completed evaluation forms are not consistent amongst each other in their format, recitation of the proposal requirements, or scoring methodology for the evaluation requirements.

He said Teregeyo stated that U-Top’s proposal was technically non-responsive because material information was provided in a foreign language and could not be evaluated.

Torres said Teregeyo also stated that DPL regulations do not provide an administrative procedure for disputes regarding its management and disposition of public lands and thus there is no basis for U-Top’s protest.

Torres said DPL is required by statute to have administrative policies, procedures, and controls related to public land that ensure that public land is used in an efficient and objective manner.

Torres said DPL does not remit concession fees to the Marianas Public Lands Trust.

The lawyer said U-Top promised to pay $360,000 in annual rental for each year of the five-year term of the Managaha concession.

He said Triple J proposed $400,000 annual rental amount for each year of the five-year term of the Managaha concession.

However, Torres pointed out, U-Top proposed to save DPL approximately 50 percent in reimbursement expenditures, totaling approximately $160,000 per year, making the total value to DPL approximately $520,000.

He said U-Top proposed a 5 percent Business Gross Revenue, as did Triple J, but Triple J proposed achieving a higher revenue than U-Top.

However, Torres said, based on the historical performance of Managaha concessionaire Tasi Tours, Triple J’s higher revenue projection was not reasonable and achievable.

Torres said none of DPL’s communication to U-Top clearly stated that U-Top was not awarded because it was outscored in the evaluation process.

DPL awarded the concession to Triple J last Jan. 24.