May 08. 2013 9:08PM

Judge denies injunction to block liquor contract award

New Hampshire Union Leader

CONCORD - The state Liquor Commission has won the first round in what is likely to be a series of court battles in Concord and Nashua over a $200 million, 20-year warehouse contract awarded in November.

Merrimack County Superior Court Judge Richard McNamara on Wednesday denied a request by XTL-NH for an injunction to block the contract from taking effect with the commission's chosen bidder, Exel of Westerville, Ohio.

"XTL has not established that the process in this case did not constitute competitive bidding," McNamara wrote.

He ruled that XTL-NH did not meet the two basic requirements for an injunction: It did not demonstrate that it would suffer immediate and irreparable harm if the contract takes effect, or that it has a strong likelihood prevailing at trial.

XTL filed a lawsuit in Merrimack County Superior Court challenging the legality of the commission's bidding process, which ranked Excel first, XTL-NH second and Law Warehouses of Nashua, third.

Second lawsuit

Law Warehouses has filed its own lawsuit in Hillsborough County Superior Court South (Nashua), and is awaiting a ruling from Judge Diane Nicolosi on its request for an injunction, pending the outcome at trial. In a hearing last week on the Law case, Nicolosi suggested to attorneys that the XTL and Law cases might have to be consolidated in some fashion.

Her ruling on the Law request for an injunction is still pending.

XTL-NH, with U.S. headquarters in Pennsylvania, was the lowest-cost bidder, but did not offer the best overall solution, according to the commission evaluation committee.

McNamara observed in his ruling that Exel has already started building a new warehouse in Bow and claims to have already spent or committed more than $12.6 million on the project. The state has a "weighty interest" in having a vendor available to it on Oct. 30, he wrote, the date the new contract takes effect.

Broad discretion

The judge agreed with the Liquor Commission position that the request for proposals allowed the commission broad discretion to waive some requirements and accept alternatives "deemed to be in the best interests of the NHSLC."

Both XTL-NH and Law Warehouses claim that deadlines and requirements in the bidding process were changed so often that by the time the contract was awarded, the request for proposals looked like Exel's bid.

"The court's decision validates the selection of Exel by the New Hampshire State Liquor Commission to provide warehousing services that are more productive, more efficient and more competitive, and we are looking forward to the start-up of these operations in New Hampshire in November," said Scott Lyons, senior director of business development at Exel.

In denying the XTL request for an injunction, McNamara noted that the merits of the case would still have to be settled at trial.