XTL-Nh, Inc. v. New Hampshire State Liquor Comm'n

• Decision Date: 04 January 2016
• Docket Number: NO. 2013-CV-119,2013-CV-119
• Parties: XTL-NH, Inc. v. New Hampshire State Liquor Commission
• Court: New Hampshire Superior Court

XTL-NH, Inc. v. New Hampshire State Liquor Commission

NO. 2013-CV-119

State of New Hampshire MERRIMACK, SS SUPERIOR COURT

January 4, 2016

ORDER

The Petitioner, XTL-NH ("XTL"), brought an action against the Respondents, the New Hampshire State Liquor Commission (the "Commission" or "NHSLC"), arising out of XTL's unsuccessful bid for a liquor-warehousing contract. XTL alleges that the bidding process by which the Commission awarded the contract to Exel, Inc. ("Exel") was unlawful under New Hampshire competitive bidding law. It moves for summary judgment on the first two elements of its promissory estoppel claim—promise and breach of promise—and on its declaratory judgment claim. The Commission cross-moves for summary judgment. Additionally, the Commission moves for clarification of the Court's October 28, 2015 Order, granting XTL's Motion In Limine to Exclude the Advice of Counsel at Trial. For the reasons stated in this Order, both Motions for Summary Judgment are DENIED, and the Commission's Motion for Clarification is DENIED.

I

On cross-motions for summary judgment, the Court must consider the evidence in the light most favorable to each party in its capacity as the non-moving party, and, if no genuine issue of material fact exists, determine whether the moving party is entitled to judgment as a matter of law. Granite State Mgmt. Res. v. City of Concord, 165 N.H. 277, 282 (2013). In order to defeat summary judgment, the non-moving party "must put forth contradictory evidence under oath, 'sufficient . . . to indicate that a genuine issue of fact exists so that the party should have the opportunity to prove the fact at trial . . . .'" Phillips v. Verax, 138 N.H. 240, 243 (1994) (quoting Dolan v. Maple Leaf Health Care Ctr., Inc., 119 N.H. 424, 425 (1979)). A fact is material "if it affects the outcome of the litigation under the applicable substantive law." Palmer v. Nan King Rest., Inc., 147 N.H. 681, 683 (2002). Mindful of this standard, the Court sets forth the pertinent, undisputed facts below.

II

On March 28, 2012, the Commission issued a Request for Proposal ("RFP") to solicit proposals from vendors for a long-term warehousing contract. (Galdieri Aff. in Supp. of XTL's Mot. Partial Summ. J. [hereinafter Galdieri Aff.] Ex. B., at NHSLC 000001.) The proposals were to instructed detail the submitting vendor's plan "for a comprehensive and efficient warehousing system" capable of meeting all of the Commission's needs. (Id. at NHSLC 000008.) The Commission was specifically interested in proposals that would be of the greatest benefit to the Commission. To this end, the RFP stated, "Vendors are encouraged to propose any arrangement of Warehouse services that will best meet the NHSLC needs as described [in the RFP]." (Id. at NHSLC 000023.) The RFP further encouraged proposals with "innovative ideas" where "the Vendor believes s/he is able to improve an operation or reduce a cost." (Id. at NHSLC 000015.)

The RFP established a question and answer process through which potential bidders could submit questions related to the RFP process that the Commission would publicly answer on its website. (Id. at NHSLC 000010-11.) The Commission's responses reiterated the RFP's desire for innovative proposals that would serve the Commission's best interests despite not strictly complying with the basic RFP requirements. For example, on May 1, 2012, the Commission clarified its answers to previous questions as follows:

The proposal must contain a written response to all portions of the RFP and appendices. The response shall at least be "understood," which means that the Vendor agrees and takes no exception to that portion of the RFP. Even where the RFP "requires" that a particular task be accomplished, the Vendor may take a clearly described exception and, if possible, suggest an alternative. The NHSLC may waive mandatory requirements and accept alternatives deemed to be in the best interest of the NHSLC.

(Id. at NHSLC 000169.) A May 1, 2012 answer further stated that the "RFP contains a large number of basic, functional requirements that must be met in some fashion. There is, however, an opportunity for the Vendor to propose a solution that reaches the same result but takes a different path." (Id. at NHSLC 000198.)

After the question and answer process and subsequent submission of proposals, the RFP required the Commission to "conduct a comprehensive, fair and impartial review and evaluation of all qualifying Proposals." (Id. at NHSLC 000035.) It stated that the evaluation process "shall include, but not be limited to, a fair and impartial ranking of all qualified Proposals." (Id.) The RFP created the Evaluation Committee ("EC") to conduct the proposal review process and make an initial determination as to which proposal would best meet the Commission's needs. (Id.) While the RFP stated that "the NCSLC is under no obligation to select a successful Vendor or to award a contract upon receipt of Proposals," it required any contract award be to the "responsive andresponsible Vendor or Vendors who submit the Proposal(s) that best meets the needs of the NHSLC and subsequently is successful in negotiating a contract with the NHSLC." (Id.) Finally, the RFP specified that the Commissioners "have discretion to draw their own fair and impartial conclusions in selecting the Proposal(s) that best meets the ends of the NHSLC." (Id. at NHSLC 000040.)

As part of the review process, the RFP delineated certain bid specifications and evaluation criteria. The RFP required the EC to first conduct a preliminary review of the proposals to determine whether they met the mandatory RFP requirements. Any proposals not satisfying those requirements were to be disqualified. After the preliminary review, the review process consisted of two phases: Phase I—Initial Analysis, Review, and Ranking; and Phase II—Vendor Presentation and Final Analysis, Review, and Ranking. (Id. at NHSLC 000036.)

Phase I specifically called for the EC to score and rank proposals based on the following criteria: (1) General; (2) Vendor Experience and Qualifications/Transition; (3) Vendor Financial Stability and Capacity; (4) Vendor Technical, Service, and Project Management Proposal/IT Competence; (5) Vendor Overall Solution; (6) Vendor Pricing and Innovation; and (7) Vendor References. (Id.) Three of those criteria—General, Vendor Financial Stability and Capacity, and Vendor References—were to be evaluated on a qualified or disqualified basis, while the remaining four criteria were to be assigned point values. (Id.)

The RFP described with additional detail the factors that the Commission would consider when awarding points for each point-based criterion. (Id. at NHSLC 000037-39.) For example, the "Vendor Experience and Qualifications/Transition" criterion description stated:

The Vendor understands and is committed to implement [sic] business relationships and protocols . . . . The Vendor has adequate warehousing and transportation knowledge and experience consistent with the nature and magnitude of the NHSLC's warehousing operation. . . . [T]he NHSLC will consider . . . [q]ualifications of candidates for key Vendor staff roles. . . . The Vendor has correctly estimated the magnitude of effort and resources necessary to provide a Warehouse, has demonstrated the ability and willingness to resolve unforeseen problems that may arise, and has shown skill in anticipating and averting potential disruption.

(Id. at NHSLC 000037.) Similarly, the description of the "Vendor Overall Solution" criterion indicates:

The EC will evaluate the ability of the Vendor to properly . . . manage[] and track incoming and outgoing shipments of Product in the timeliest, efficient and cost effective [sic] manner. . . . The Vendor must demonstrate suitable financial strength, stability and capacity to undertake a sophisticated and capital intensive Warehouse operation with a high degree of performance and in a timely manner.

(Id. at NHSLC 000038.) Additionally, the "Vendor Technical, Service, and Project Management Proposal/IT Competence" criterion required the EC to evaluate whether the vendor can satisfy all of the IT requirements in Appendix K of the RFP as well as the vendor's "ability to understand, implement, and support all MIS/computer/business protocols in a timely and skilled manner." (Id. at NHSLC 000037-38.)

During Phase II, the RFP provided that the EC could "require a Vendor to participate in oral and/or written presentations on any aspect of its Proposal" or "demonstrate any Product(s) and/or service(s) proposed." The purpose of this phase was "to clarify and expound upon information provided in the written Proposals." The EC could consider any additional information gained from this phase when assigning point values to each of the point-based criterion. (Id. at NHSLC 000040.) The RFP also permitted the EC to solicit Best and Final Offers ("BAFOs") "from Vendors who have submitted qualified Proposals and which have been determined to be reasonablypossible of selection for a contract award." (Id. at NHSLC 000040-41.) The RFP required the EC to evaluate BAFOs against the criteria used in Phase I. (Id.)

After completing both phases, the EC was to submit its final scoring and recommendation to the Commission. However, the RFP anticipated that the EC's recommendation would not be conclusive because the Commissioners had "discretion to draw their own fair and impartial conclusion in selecting the Proposal(s) that best meets the needs of the NHSLC." (Id. at NHSLC 000040.) The RFP provided that the Commission would then select the desired vendor and engage in contract negotiations, which, if successful, would result in the contract award. (Id.)

Five vendors, including XTL and Exel, submitted proposals on June 7, 2012. (Galdieri Aff. Ex. H, at 12.) In its proposal, XTL indicated that each of the criterions was "understood in its entirety." (Fredericks Aff. in Supp. of NHSLC's Obj. to XTL's Mot. Partial Summ....