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NH judge: Liquor lawsuit worthy about illegal awarding of contract

New Hampshire Union Leader

July 18. 2014 7:53PM

The Pennsylvania company that claims the New Hampshire State Liquor Commission illegally awarded a $200 million warehouse contract to a competitor in 2012 can go to trial to try to recover up to $54.4 million in lost profits, a state superior court judge ruled Friday.

But XTL-NH lnc. of Philadelphia lost its bid to get the court to award it the contract, or at least re-bid it, and to be compensated for attorney’s fees and costs incurred during its long battle with the liquor commission.

In his 12-page order, New Hampshire Superior Court Judge Richard B. McNamara said XTL-NH’s claim that it should be able to recover lost profits because of alleged unfair competitive bidding practices is an issue of fact to be resolved at trial.

McNamara, who is presiding justice at the state’s business court, ruled a bidder’s “reasonable reliance on a public entity’s promise to award the contract to the lowest responsible bidder may entitle a bidder to damages” under breach of contract claim.

XTL-NH estimated it incurred $318,563 in costs and lost $52.9 million to $54.4 million in profits over the course of the 20-year contract.

XTL-NH maintains it was the highest-scoring bidder during the bidding and evaluation process conducted by the liquor commission, but the commission illegally ranked it second behind Excel Inc. of Westerville, Ohio.

XTL-NH. alleged the liquor commission’s bias in favoring Excel violated laws governing competitive bidding practices.

The liquor commission awarded Excel the contract on Nov. 20, 2012. Excel built a warehouse in Bow and has been operating since November.

Neither XTL-NH President Louis Cerone nor his attorney, James Bianco of Concord, returned calls for comment Friday.

The judge denied XTL-NH’s bid to have the court rescind the contract between the liquor commission and Excel and award it to XTL-NH or require it be sent out to bid again.

McNamara cited provisions in the request for proposal (RFP) that gave the liquor commission “broad discretion to waive particular requirements, so long as the alternative would be in the best interest of the commission.”

The RFP empowered the liquor commission to “solely resolve any matter requiring interpretation.” The commission also can “waive mandatory requirements and accept alternatives deemed to be in the best interests” of the liquor commission, the judge wrote.

Mary Ann Dempsey, civil bureau chief at the New Hampshire Attorney General’s office, represents the New Hampshire State Liquor Commission in claims brought against it by XTL-NH and Law Warehouses of Nashua, which came in third in the bidding process.

“We believe the bidding process was complied with and the vendor with the best proposal was selected,” Dempsey said.

XTL-NH’s case against the New Hampshire State Liquor Commission is set to go to trial in Merrimack County Superior Court in Concord in January.

Law Warehouses’ case is set to go to trial in Hillsborough County Superior Court in Nashua in November. The case follows Law’s failed effort to get a court injunction in June 2013 to block the contract award.

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