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Board of Public Works puts off vote on I-95 travel plaza modernization

ANNAPOLIS – The Board of Public Works Wednesday deferred its decision on a disputed contract proposal to renovate two travel plazas on Interstate 95 in Harford and Cecil counties.

The deferment pushes the board’s vote to its next meeting, March 7. Comptroller Pete Franchot moved to defer the decision, with Treasurer Nancy K. Kopp seconding the motion.

Areas USA Inc., which was the winning bidder on the Maryland Transportation Authority project, is alleged by HMSHost, a losing bidder, to have received an unfair advantage in the bid process. HMSHost’s contract to manage the Maryland House and Chesapeake House on I-95 expires Sept. 1.

A lawsuit filed Friday by Bethesda-based HMSHost in Montgomery County Circuit Court sought a Temporary Restraining Order to prevent the Board of Public Works from approving the contract. The suit alleged Areas was allowed to negotiate with the MDTA after its initial proposal was submitted, whereas other bidders were not offered that opportunity.

Wednesday afternoon, Montgomery County Circuit Court Judge Eric M. Johnson issued a temporary restraining order to prevent the state from awarding the contract. The order expires at 9:30 a.m. March 7 — a half-hour before the next scheduled Board of Public Works meeting.

“Why shouldn’t we defer this award until this legal challenge is figured out one way or the other?” Franchot asked after state transportation Secretary Beverley Swaim-Staley presented Areas’ proposal.

Swaim-Staley said negotiations only began with Areas after the MDTA’s seven-member board unanimously approved the company’s bid. Stanley Turk, an assistant state attorney general, said he believed the process was “a legally conducted procurement.”

HMSHost believes it should have been given the chance to submit a so-called Best and Final Offer. Swaim-Staley, however, said that was not necessary because Areas’ proposals was “significantly better” than other bids.

“We would have had a [Best and Final Offer] had we thought the proposals were close,” she said. Instead, the MDTA was confident enough in Areas’ offer to select its proposal, then start negotiations to sweeten the pot.

“Once you select a winning proposal you always go back and try to squeeze a better deal for the state,” Swaim-Staley said.

Tom Fricke, president and CEO of HMSHost, said the state’s process was unfair, and that he was confused by assertions made by Swaim-Staley that Areas won in all three requirements set forth by the MDTA’s Request For Proposals: that the renovations create a new or like-new facility, allow for a positive customer service experience and result in a fair financial return for the state.

“To hear we lost on all elements of the bid, I’m surprised by that,” Fricke said, adding that HMSHost’s relationships with retailers ought to have made its bid more attractive.

“We have Starbucks, they have Caribou Coffee,” he said. “I’ll take that matchup.”

Questions have also been raised about Areas’ experience in managing travel plazas in the United States. Areas, a subsidiary of Spanish-owned Areas S.A., is running eight travel plazas on the Florida Turnpike, and some state officials there have said they are concerned about the company falling behind on a $100 million modernization project.

“We’re signing off on the next 35 years … for a company that’s never done business in Maryland,” Franchot said. “That strikes me as real leap of faith.”

The company, however, says the renovations in Florida will be completed on time, and Swaim-Staley said she “personally spoke with the secretary of transportation in Florida” and that he was “very pleased with their selection” of Areas.

“Right now, we are on time,” said Xavier Rabell, the company’s CEO. “We haven’t lost any deadline.”

Rabell, who spoke before Gov. Martin O’Malley, Franchot and Kopp for less than 10 minutes before the board moved to defer its decision, said he was surprised by the state’s decision.

“I was expecting a different resolution, but we have to respect it,” Rabell said, before turning his attention to HMSHost’s lawsuit. “They try to delay with no merit … we don’t see any issue.”

The Areas proposal, part of a public-private partnership with the state, calls for an initial $56 million investment by the company, which has a “firm commitment” to complete its work on both plazas by September 2014. Areas will manage and maintain the property for 35 years, ending in 2047. MDTA also reserves the right to cancel Areas’ contract should the company fail to deliver, Swaim-Staley said.

Swaim-Staley said she expected 400 construction jobs to be created during the renovation process.