Company challenges award of travel plaza contract

The multimillion-dollar contract to turn Maryland's travel plazas on Interstate 95 over to an out-of-state company is being challenged by a Bethesda-based firm that says the bidding process favored the eventual winner.

HMSHost has filed a protest with the Maryland Transportation Authority, saying that bid specifications to replace the Maryland House and Chesapeake House were too vague and that Areas USA, a Florida company, was the only bidder allowed to sweeten its offer.

"This is like a kick in the gut and we're trying to get our breath back," said Michael Jones, the HMSHost vice president who put the bid together. "The governor always says the state is open for business, but the state has not demonstrated that Maryland is open to state businesses. This doesn't add up."

Time for an appeal may be running out. The Board of Public Works is scheduled to vote on the Areas contract Feb. 22 and the General Assembly is conducting a separate review. A state transportation spokesman said there are no plans to ask for a delay.

"We don't know that [the authority] has a time limit to respond. In their minds, maybe they think they can … run out the clock," Jones said, adding that HMSHost had asked the agency to explain its decision. "We asked for a debriefing and we have gotten no response."

The attorney general's office is reviewing the protest, which was filed late Monday, to determine how to proceed, state transportation officials said in an email Tuesday afternoon.

A representative for Miami-based Areas said the company would not comment on the selection process.

The challenge by HMSHost is the second setback in the authority's plan to create a public-private partnership similar to the deal Maryland has struck with Ports America Chesapeake to run the Sea Girt Marine Terminal in Baltimore.

Areas has promised to invest $56 million in building two new travel plazas and to run them for 35 years. In return, the state would retain ownership and receive revenue estimated at more than $442 million.

Plans to replace the "functionally obsolete" 48-year-old Maryland House and 36-year-old Chesapeake House date to the Ehrlich administration. In 2010, transportation officials developed a 700-page request for proposals and identified nearly a dozen potential bidders, but abruptly withdrew the document when only one company — HMSHost — indicated it would bid.

HMSHost and its parent company have held the contract to operate the two plazas since 1987. The plazas, along with HMSHost concessions at Baltimore-Washington International Thurgood Marshall Airport and the Arundel Mills food court, employ about 1,000 people.

The state pared down the bid request to 125 pages and three goals: Create new or refurbished service plazas; ensure "a positive customer experience;" and provide "a fair rate of return" to the state.

Transportation Secretary Beverley Swain-Staley said 40 firms attended a pre-bid conference "and that told us we were on the right track." She called the revised bidding process "part of the learning curve" in developing public-private partnerships.

But in the end, only three companies bid: Areas, HMSHost and another that state officials would not identify.

One — Areas — was invited by the state to make an enhanced offer, Jones said. He said HMSHost had proposed spending $75 million to reconstruct the plazas, but offered less than Areas to the state in revenue sharing.

"If they call one party back in, they should call all parties back in," Jones said. "Let's have some transparency. If the state wants to promote public-private partnerships, what kind of message is this sending to future bidders?"

In a written statement, transportation officials said they could not comment on the HMSHost protest. However, their report to the General Assembly said Areas "improved its initial financial terms following negotiations, which translated to more than $65 million in additional revenue payments."

HMSHost operates more than 70 highway facilities in 11 states, including Pennsylvania, New Jersey and New York, and 17 service areas in the province of Ontario. Among them is the $35 million Delaware Welcome Center Travel Plaza on Interstate 95, just north of Maryland.

Areas USA is rather new to the U.S. highway hospitality business, but it has extensive experience at airports around the world and in this country, including Reagan National in Washington. In 2009, Areas won a $162 million contract to renovate all eight service plazas on Florida's Turnpike.

Comptroller Peter Franchot, one of three Board of Public Works members and a resident of Montgomery County, declined comment. But his spokesman, Joseph Shapiro, said "in general, the comptroller is very supportive of public-private partnerships and thinks this is a model he'd like to see duplicated at other state- owned and -operated rest stops."

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