USA. Denver Auditor Dennis Gallagher says he is reviewing the recent award of the Denver International Airport (DIA) duty free contract to Dufry, following a legal challenge by the runner-up, a DFASS-led joint venture.
DFASS confirmed to The Moodie Report that it believes that city and airport officials conspired to help the winning bidder. Dufry declined to comment to The Moodie Report. We have approached all concerned parties, including DIA, and will bring you any resultant reaction.
In a Denver District Court complaint, DIA Retail Fashion (DFASS/JAF Concessions) alleged that airport officials had communicated privately with Hudson Group since 2013 and altered contract bid terms to benefit the Dufry-owned retailer. The DFASS partnership claims that the ‘cone of silence’, supposed to be in place during the tender process to ensure that matters relating specifically to a tender are not discussed, was broken.
Those claims will be rejected forcefully by DIA. The airport authority will argue the independence, rigour and transparency of its tender processes. The decision to award to Dufry was made unanimously by a five-person panel, none of whom were airport executives. All commercial contracts have to then be signed off by the Denver Auditor and the Mayor, both of whom have approved the Dufry award (in the Auditor’s case on Wednesday). DIA believes that no matters germane to the tender would have been inappropriately discussed by its management, The Moodie Report understands.
 |
Dufry North America is set to operate at Denver International Airport from June 2015 |
“While we take all claims seriously, the City Attorney has reviewed the allegations put forth by this unsuccessful bidder and believes they have no merit,” Denver City Attorney Scott Martinez said in a statement supplied to The Moodie Report. A Hudson Group representative also told The Denver Post that the company had not acted improperly.
DIA Retail also sought an injunction forcing the city to withdraw the contract awarded in June but this was declined by the presiding judge. DIA Retail also filed an administrative appeal with the City. Arguments are set for 15 December.
In a statement, Gallagher (who, as mentioned, signed off the Dufry agreement) said: “The Auditor, as he does with all contracts that come to him for signature, is reviewing a Duty Free Concession agreement at DIA. As part of that, he is examining depositions and other documents that have been provided to him that allege possible wrong-doing on the part of some city employees and officials related to the awarding of that concession. He is very disturbed about the allegations.
“While these are just allegations at this point – nothing has been proven – they are very serious and if true undermine the integrity of the process. All of us as stewards of the public trust are obligated to maintain the highest ethical standards.”
Auditor Gallagher continued in his statement: “People are often all too quick to believe that corruption lurks around every corner. We must assiduously guard against that. I am hopeful that these allegations turn out to be just that: allegations and that there was nothing untoward or unseemly done in the awarding of this concession agreement.
“Nonetheless, I would be derelict in my duty to the citizens of Denver if I did not do my own due diligence in this matter so I am rigorously reviewing this contract and related material.”
The Auditor also noted that some of the actions alleged in the documents relate to issues he raised in an audit of DIA’s a Concessions Management program, released in February 2014.
In his transmittal letter accompanying the audit report he wrote, “I remain concerned that DIA concession’s contracts are being operated and/or owned by an increasingly small group of companies and individuals. It is troubling that DIA would change the percentage limits that a concessionaire can hold – from 20% to 24% – to seemingly accommodate one large vendor.
“Additionally the methodology for calculating ownership percentages has been changed and this has also seemingly benefited the large concessions groups.”
The audit also stressed that the evaluation and selection of concession awards lacks transparency and that lack of transparency can lead to questions of the fairness of the process.
 |
How The Denver Post Post broke its story today |
