Duty Free Americas to protest Atlanta award

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The Falic Group is to launch a second protest against the award of Atlanta-Hartsfield International airport's duty-free contract to Duty Free Air & Ship Supply (DFASS) last October

The Falic Group is to launch a second protest against the award of Atlanta-Hartsfield International airport's duty-free contract to Duty Free Air & Ship Supply (DFASS) last October. According to the Atlanta Daily Record, the Duty Free Americas (DFA) owner believes that DFASS failed to meet the criteria set by the airport, and that it misrepresented its interest in a duty-free contract at a Trinidad airport.

The report also claims that city records show that the selection committee
unanimously chose Atlanta Duty Free's (Duty Free Americas with minority partner Brook Jackson Edmond) bid over that of DFASS and its partner, David M Franklin. But the committee's decision was overruled by airport general manager Benjamin DeCosta, who sent a memo instructing his procurement officer to enter negotiations with DFASS.

DFA's first appeal against the decision, arguing that its competitor failed to meet bid criteria, was turned down on November 5 2003. The Record reports that on November 24 last year DFA provided a document showing that DFASS had never operated a concession at Trinidad airport, as its bid documents suggested. DFASS' minority partner responded by providing documentation showing that, while not the contract holder, it had some involvement in a concession. The protest hearing will be held on March 30.

The city's seemingly contrary behaviour in the tender competition is compounded by DFASS partner David Franklin's political connections. The minority partner is husband of former Atlanta mayor Shirley Franklin, and the Record suggests that prior to the tender David Franklin asked the city to reduce minority participation requirements. Local law firm Balch & Bingham, which represented DFA in its first protest, has told the city it will not handle the case anymore.

May 2002: David M. Franklin, ex-husband of Mayor Shirley C. Franklin, entreats the city to lower requirements for minority contractors participating in the bid, explaining that minorities have not had the opportunity to gain the required experience operating duty-free shops.

August 2002: The city receives two bids for the duty-free concession at the international concourse: Atlanta Duty Free, with majority partner Duty Free Americas and minority partner, Brook Jackson Edmond, the daughter of the late Mayor Maynard H. Jackson Jr.; and Duty Free Air & Ship Supply, with minority contractors David M. Franklin and two of his adult children.

December 2002: The city holds oral interviews with the two bidders. City records show that the team unanimously chose Atlanta Duty Free, Jackson"s daughter"s group, by more than 7 points.

Sept. 10, 2003: Airport General Manager Benjamin R. DeCosta sends a memo to procurement chief Adam L. Smith overruling bid evaluators" scores, and instead choosing the partnership involving David Franklin.

Sept. 18, 2003: Memo from DeCosta instructs Smith to enter negotiations with the ìtop-ranked proponent,î Duty Free Air & Ship Supply.

Oct. 9, 2003: Atlanta Duty Free sends a memo to DeCosta, informing him that the $110 million bondholder suit against Duty Free Americas, its majority partner, is about to be settled.

Oct. 15, 2003: Letter from Smith to Duty Free Air & Ship Supply congratulates the company for being the ìmost responsible and responsive proponent.î A letter also went to Atlanta Duty Free telling the company it lost the bid.

Oct. 17, 2003: Atlanta Duty Free filed an open records request for all documents pertaining to the bid.

Oct. 27, 2003: Balch & Bingham filed a protest letter, alleging Duty Free Air & Ship Supply could not have been the most responsive bidder because it didn"t meet the city"s bid criteria.

Nov. 5, 2003: Bondholder suit against Duty Free Americas is settled. The city denies the bid protest.

Nov. 17, 2003: Balch & Bingham tells the city it won"t handle the case any longer.

Nov. 24, 2003: Atlanta Duty Free provides a document showing Duty Free Air & Ship Supply never has operated a duty-free concession at the Trinidad airport, as its bid document suggests.

Dec. 15, 2003: David Franklin provides documentation that his majority partner, Duty Free Air & Ship Supply, while not the official operator of the Trinidad concession, provided assistance.

Jan. 8, 2004: Atlanta Duty Free inquires about the city"s 38-day delay in scheduling a protest hearing.

March 30, 2004: Atlanta Duty Free will face city lawyers at the protest hearing.

Bulgaria To Tax Duty-free Shops Turnover Instead of Profit
310 words
18 March 2004
Bulgarian News Digest
English
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Bulgarian Finance Ministry will propose that duty-free shops pay taxes on their turnover, but not on their profits because many of them violate the law by transferring part of their profits to their loss-making activities.

A check has showed that some of the duty-free operators own also other companies.

According to the association of duty-free operators, their sales in 2003 increased by 30 pct year-on-year. Ten companies, members of the association, accounted for 90 pct of duty-free trade turnover in the country, reporting a turnover of 64 mln euro ($79 mln) in 2003, up from 48 mln euro ($59 mln) in 2002.

In end-2003, Finance Minister Milen Vechev issued permits to 14 companies to operate 49 duty-free shops, thus giving up the Government-approved closure of all duty-free shops alongside the country's land borders. The companies that were awarded the permits are Aidatour, Amfora, Belatour, BNK, Vassilevi Bros, Deneb, Corecom Princess, Varna Airport, Burgas Airport, Sofia Airport, Panchatantra, Seacom, Sofcom and Transimpex.

The Bulgarian government has approved the closure of all duty-free shops alongside the country's land borders by December 31, 2003 as one of the measures for fighting shadow economy and smuggling. According to Finance Ministry data, most of the smuggled spirits and cigarettes, which are without excise stamps or have fake stamps on the home market, enter the country through duty-free shops. The state budget sustains an annual loss of some 50 mln Bulgarian levs ($28.9 mln/25.7 mln euro) from illegal trade.

(Alternative spelling: Veltchev, Amphora, Vasilevi, Bourgas)

IN TWO months the quantity of excise labels on cigarette and alcohol goods doubled, said finance minister Milen Velchev while talking about fighting gray economy. Special labels will be devised for cigarette products sold by the duty free shops, while marks denoting the duty free status will be abolished. Thus, if contraband stuff is seized on Bulgarian territory, the authorities will know which free shop imported them, he explained. The free shops network will be connected online with the customs administration, so that the latter can check their sales. Identification data on the buyer will be entered in the network. Whenever the quantities exceeding the permitted levels cross the border, they will be spotted by the system and the republican budget will not miss revenue from the levies. Duty free dealers will pay a tax on their turnovers, not on their profits, read the draft bill on duty free trade.

The bill will be first consulted with the Association of Duty Free Operators. We concluded that this business, unusually profitable by the way, pays minimal taxes, because of internal cross subsidies typical for its activities, said the finance ministry chief secretary Tencho Popov. This is why we decided to tax the turnovers, not the profits, he explained. After the upgrade of the excise labels their consumption doubled in the first two months of this year, Velchev stated. Minister Velchev will suggest a package of anti-corruption measures during the next mission of the International Monetary Fund(IMF) due to arrive end-March. Among the anti-corruption measures to be undertaken is the Finance Intelligence Service, a new act on duty free trade and setting up a national revenue agency.