ATL concessions: Winning vendor here in legal battle since 2007 in Orlando
By David Pendered
An Atlanta-based airport concessionaire that was awarded a major contract at Atlanta’s airport is the subject of litigation in Orlando that dates to an airport contract it won there in 2007.
The case illustrates the fierceness of battle that can be waged over government contracts to sell products to airline passengers. The Atlanta contracts are valued at about $3 billion over a lifespan of seven to 10 years. The Orlando case involves a 15-year, $300 million contract.
The situation now before U.S. District Court in Orlando has some interesting twists. The losing vendor, which is seeking to oust the Atlanta company, was founded by a man whom federal authorities charged in 2002 in relation to allegations that he had ties to Middle East terrorist organizations.
Those charges were dismissed when Jesse Maali died. But two of his associates were convicted of conspiracy, fraud, tax-evasion and money laundering, according to a report by Businessweek.com.
The Orlando case involves Hojeij Branded Foods. The company is not a defendant. However, Hojeij’s bid submitted to the Greater Orlando Aviation Authority is the subject of a federal lawsuit brought by the company Maali founded.
Maali’s company, and other plaintiffs, is seeking relief including an order that its property was taken; an unspecified amount of compensatory damages; costs related to the case, and other reliefs the court feels is in order, according to court documents.
In Atlanta, Hojiej will run all the food and beverage sites in Concourse A, which is a major Delta Air Lines concourse. Hojeij now runs all but one food and beverage site in Concourse E.
The case brought by Maali’s company and other plaintiffs contends that Hojeij did not meet federal criteria to compete as a disadvantaged business enterprise. The plaintiffs contend that Hojeij’s CEO, Carol Hojeij, had a net worth in 2007 that exceeded the maximum limit of $750,000 established by the federal government for certification as an “airport concessions disadvantaged business enterprise.”
The plaintiffs contend they have fought the Greater Orlando Aviation Authority for years for the documents they contend establish that Hojeij does not meet the criteria, according to records filed in the Orlando court.
The plaintiffs contend that the Orlando airport authority spent years “falsely representing the content” of a memo that they contend shows Hojeij does not meet the criteria, according to a plaintiff’s motion filed Jan. 20. Then the authority contended that the plaintiffs should be penalized for “not figuring out that defendants had falsely represented, on multiple occasions, the content of the administrative record to the plaintiffs,” according to the motion.
The Orlando situation bears a resemblance to Atlanta’s efforts to withhold certain documents from losing vendors. Atlanta has contended, as Orlando has, that it cannot – by law – release certain information provided to the government by companies seeking government contracts.
In a current Atlanta proceeding, Fulton County Superior Court Senior Judge Cynthia Wright ordered the city on Jan. 25 to release documents requested by a company that has protested its lost bid for a concessions contract to run duty free shops at Hartsfield-Jackson Atlanta International Airport.
The city released thousands of documents by the Jan. 27 deadline set by the judge. It is not clear if the documents contain all the information Wright ordered to be released. Atlanta also has released millions of pages of documents related to the food and beverage contracts the Atlanta City Council approved on Jan. 3.
The Orlando memo that the airport authority worked so long to retain is a report presented to the authority by Winter Park lawyer Ometrias Deon Long.
Long was to investigate if Carol Hojeij, the CEO of Hojeij Branded Foods, meets the federal criteria as a “socially and economically disadvantaged individual.” That criteria is defined as having a net worth of less than $750,000, according to the memo.
Here is the executive summary of the memo, dated June 19, 2007:
“Based on current analyses, Carol Hojei failed to list key information concerning her personal net worth, on Mrs. Hojeij’s initial application for Disadvantaged Business Enterprise (DBE) status, with the Greater Orlando Aviation Authority (‘GOAA’). Subsequent requests for information have revealed that Mrs. Hojeij’s actual net worth exceeds the $750,000 limit. Mrs. Hojeij now submits a letter from Omni National Bank, referencing a potential loan to Mrs. Hojeij.
“Whether Carol Hojeij’s solicitation for a loan, as evidenced by a letter from Omni National Bank, enables Mrs. Hojeij to exclude $450,000 in income from personal net worth calculations under 49 CFR ~23.3(2006), so as to enable Mrs. Hojeij to remain under the $750,000 net worth limit.
“No, because Mrs. Hojeij has no current and verifiable obligation in place, as is required under 49 CFR ~23.3(2006).”
In the recent Atlanta concessions bid review, Hojeij Branded Foods received a top score from Atlanta’s selection team for meeting goals aimed at promoting disadvantaged business enterprises, according to a score sheet released by the city. All seven prime concessionaires received a score of 150.
Hojeij is listed as a disadvantaged business with the Georgia Department of Transportation, which serves as a one-stop-shop for certifying most DBEs in Georgia.
That said, criteria for DBE certification at airports is set by the Federal Aviation Administration. Criteria for “airport concessions disadvantaged business enterprises (ACDBEs) may be different from criteria set by the federal Department of Transportation.
Hojeij received a score of 40 on its financial capability. Scores of six other prime vendors ranged from a low of 10 to a high of 47, according to the city’s score sheet.
No claims have been made public that contest Hojeij’s standing as a disadvantaged business enterprise for the Atlanta concessions package.