When the Hawaii Department Transportation awarded an airport shuttle concession contract to transportation giant Robert’s Hawaii, the new service seemed like a dream for visitors and residents.
Robert’s promised to launch its shuttle to and from Honolulu’s Daniel K. Inouye International Airport with a fleet of at least 50 new 2018 Ford shuttle buses, each equipped with 40-inch monitors, WiFi and GPS tracking allowing real-time updates to passengers.
The Robert’s proposal also called for islandwide service to and from the airport.
Now, with the service planned to start Sunday, Robert’s chief competitor is crying foul.
Speedishuttle LLC, which currently has the shuttle contract, alleges Robert’s pulled a bait-and-switch when submitting its proposal for the contract. Speedishuttle claims Robert’s made promises it won’t be able to keep come Sunday.
In a lawsuit filed in state Circuit Court, the company has asked for a temporary restraining order stopping Robert’s from operating the shuttle service until it can provide the 50 2018 shuttle buses and islandwide service its winning proposal calls for.
Robert’s and the Hawaii Department of Transportation opposed Speedishuttle in a hearing Monday before Judge Jeffrey P. Crabtree.
Another court date is set for Friday, but the parties began laying out their arguments Monday.
The crux of Speedishuttle’s argument involves the proposals submitted by the two companies that the Department of Transportation used to award the contract. Speedishuttle alleges that the packages were roughly the same except for the large, high-tech bus fleet and islandwide service that Robert’s promised.
Speedishuttle basically claims that Robert’s won the contract based on those services, but that it will not provide them immediately, if ever.
Citing the litigation, Luly Onemori, a spokeswoman for Robert’s, declined to say whether the company would provide the promised buses or islandwide service starting next week.
Whether courts are willing to grant a restraining order or injunction usually turns on a three-pronged test: the likelihood that a party will succeed on the merits, whether the party seeking the injunction will suffer irreparable harm if the court doesn’t grant the order, and that granting the injunction would serve the public interest.
Although the parties argued about those issues Monday, much of the hearing focused on the question of standing. Arguing for the Department of Transportation, Julia Verbrugge, a deputy attorney general, questioned whether Speedishuttle had a right of action. Although state law generally requires competitive bidding, ground transportation concessions at airports are specifically exempted from the requirement, which meant Speedishuttle couldn’t sue, Verbrugge said.
Instead of a competitive bidding process, the Department of Transportation relied on a no-bid request for proposals, which ranks proposals from contractors and allows agencies somewhat more discretion to choose the winning contractor.
Robert’s attorney Bert T. Kobayashi, Jr., made a similar argument. He said that in 2011, Robert’s had been in Speedishuttle’s position, arguing to uphold the contract after Speedishuttle could not provide buses compliant with requirements of the Americans With Disabilities Act. At the time, Circuit Court Judge Virginia Crandall sided with Speedishuttle and said that Robert’s did not have standing to sue under Hawaii’s statute governing Concessions on Public Property.
But Speedishuttle’s attorney, Leinaala Ley, distinguished her complaint from Robert’s earlier one, saying the current matter involved not just an alleged statutory violation, but broader common law claims that the DOT had been arbitrary and capricious when granting the contract. Robert’s proposal, she said, was “per se fraudulent bidding behavior.”
If Crabtree was leaning either way, he didn’t show it Monday. He peppered both sides with questions and postponed a decision until Friday in order to give the parties the chance to file more papers clarifying their arguments. The judge did, however, say that he was not bound by Crandall’s earlier order.
Crabtree also questioned whether it would be OK, even in the context of a request for proposals, for a company to simply not provide the services it had promised to provide when entering a contract with the state government.
“Are there any limitations on the state at all if it goes down the proposal route?” he asked.
Crabtree also questioned whether the Department of Transportation could fall back on exemptions allowed by the public concessions statute once it opened the matter up to the request for proposal process. The concessions statute would have allowed the department to negotiate directly with Robert’s if it had chosen to.
“I hear you saying that ‘we could have bid directly,’ but you didn’t,” Crabtree said.