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The lucrative contract to market Hawaii’s visitor industry to the United States remains shrouded in uncertainty as the Hawaii Tourism Authority determines whether its controversial procurement process will end in historic change.
On June 2, HTA awarded its largest contract, the US Global Support and Brand Management Services contract, to the Council for Native Hawaiian Advancement. The new contract, worth more than $34 million over the first two years, was scheduled to begin June 30 and end December 31, 2024. The contract comes with an option to extend for an additional two years.
If the award stands, it will be the first time a Native Hawaiian group has taken over marketing for the state’s largest source of visitors. It would also be a rare example of an indigenous non-profit in the forefront of a state tourism agency.
But the case is far from over.
Executives from the Hawaii Visitors and Convention Bureau, the losing bidder and current contract holder, met with HTA officials on Tuesday for a formal debriefing, and they have until next Tuesday to dispute the price of the CNHA.
It is unclear whether HVCB, the sole entity to hold HTA’s US marketing contract, will appeal.
HVCB President and CEO John Monahan declined to comment because he is still under a nondisclosure agreement, a condition of HTA’s procurement process.
HTA officials, meanwhile, said they plan to expand the organization so it can temporarily handle the U.S. marketing operation if the extension of HVCB’s current contract, which expires June 29. , expires before a new US contract is finalized.
HTA President and CEO John De Fries said in a statement that the agency “will fill the void in brand management and visitor education for the U.S. market internally, using funding existing”.
“Contingency planning is underway at this time, which may include temporary reassignment of staff, temporary emergency hires, emergency procurement and the calling in of HTA board members in an advisory capacity,” a- he declared.
Even if HVCB decides not to appeal and CNHA takes over on June 30, the plan calls for a 90-day transition, according to public RFP process documents obtained by Honolulu Star-Advertiser.
If HVCB challenges CNHA, it will open the door to even more questions about an already complicated procurement process.
Based in Kapolei, the CNHA describes itself as a nonprofit organization whose mission is to enhance the cultural, economic, political, and community development of Native Hawaiians. The group says its services include financial counseling and providing grants and loans targeting underserved communities in Hawaii.
The CNHA initially lost the first draft of the five-point RFP to HVCB, according to public filings released by HTA to the Star-Advertiser on Monday.
The HVCB score was 581.3 points, while the CNHA score was 576 points. Wondros/IQ360, led by Patrick McGovern and Lori Teranishi, was the third runner-up with a score of 543.3.
letter of protest
On December 10, HTA awarded HVCB a four-year contract to market the United States worth $22.5 million in the first year with an option to extend for one year. Seven days later, the CNHA sent Department of Business, Economic Development and Tourism Director Mike McCartney a 14-page protest, after which he rescinded HVCB’s bid.
The CNHA said in its letter of protest: “Given the importance of this industry to the culture, natural resources and economic development of this place we have called home for nearly 2,000 years, we feel compelled to protest this decision and strongly urge the leadership of HTA to find that the best value for the State of Hawaii and its people has not been met by this decision.
McCartney declined to comment due to procurement rules.
The CNHA’s protest letter alleged that committee member Karen Hughes gave it a low outlier score, which she said skewed the results by negating the scores of five committee members. He said HTA’s procurement officer during a December 13 briefing acknowledged that the outlier scores affected the decision.
The CNHA also argued that Hughes had a conflict of interest as a former HVCB executive.
The CNHA said that in raising the issue of Hughes’ bias during a debriefing, HTA’s procurement officer indicated that Hughes, who had worked for HVCB six years ago, was out of business. a five-year prior employment window that was used as the threshold for determining conflict.
Hughes, former vice president of marketing and product development for HTA, declined to comment. She was the only committee member with a long history in Hawaii’s hospitality industry.
Other committee members for the first tender included Laci Goshi, who at the time served as the HTA brand manager for the US market; Kalani Ka’ana’ana, HTA Brand Manager; George Kam, Chairman of the Board of HTA; David Arakawa, HTA Board Member; Maka Casson-Fisher, HTA Brand Manager; and Mahina Paishon-Duarte, a social entrepreneur with two Hawaii-based businesses and co-founder of Waiwai Collective.
Second turn
Changes to the scope of work in the second version of the request for proposals, which HTA re-solicited in April, added the requirement for an overall support services management plan. The RFP 2 scoring model has been modified to minimize marketing. Wording has been added to allow the new contractor to start without a permanent team in place.
The composition of the selection committee changed during the second version of the request for proposals, as did the scores and the candidates.
Arakawa, Kam, Ka’ana’ana and Paishon-Duarte returned to serve on the second DP judging committee. However, Hughes, Goshi and Casson-Fisher were replaced by State Harbors Administrator Davis Yogi, Kualoa Ranch President and Owner John Morgan and Nalani Brun, Director of the County Office of Economic Development. Kauaï.
The second RFP committee, which did not include any hoteliers, chose CNHA over HVCB by a margin of 103.9 points. The second round CNHA score was 724 and the HVCB score was 620.08.
For the second call for tenders, only HVCB and CNHA applied.
CNHA asked Wondros, the third finalist in the first tender, to become a major marketing contractor. Leslie Dance, former Vice President of Marketing and Product Development at HTA, is part of the Wondros team.
The CNHA dropped other well-known names from the Hawaii visitor industry in its first and second RFPs. However, Star-Advertiser research confirmed that at least two of the team members proposed by CNHA – Jerry Gibson, of the Hawaii Hotel Alliance and BRE Hotels and Resorts, and Tom Kiely, former CEO/co-founder of XTERRA – had not committed to the organization. .
CNHA CEO Kuhio Lewis declined to address the discrepancies due to a nondisclosure agreement related to HTA supply.
CNHA named Gibson as part of the transition team for its second RFP, which also included Lewis; Acting Executive Director Amy Kalili; Doug Chang, General Manager of Ritz Carlton Residences, Waikiki Beach; Ann Botticelli, former Hawaiian Airlines executive; Micah Kane, president and CEO of the Hawaii Community Foundation; Rebecca Soon, owner of Solutions Pacific and Ward Research; Frank Haas, industrial and marketing consultant; Roy Tokujo, Ulalena and Ko’ Olina Marketing, former president of HVCB; Kuha’o Zane, President of the Edith Kanaka’ole Foundation; Aaron Sala, president of Gravitas Pasifika and cultural practitioner; and an unspecified HTA representative. Ku’uipo Kumukahi, director of culture at the Hyatt Regency Waikiki, was named a potential member of the transition team.
Gibson’s name was important to the selection committee, as indicated by a clarifying question, where reviewers sought to ensure his participation.
The committee asked the CNHA: “Mr. Jerry Gibson was on the list of potential executives for your transition team. Have you received a commitment that he will be part of the transition team if this contract is awarded to him? »
The CNHA told the evaluators that all of the members on the transition team had been confirmed.
CHNA told the committee: “We have listed (nominated) next to Mr. Gibson because we understand that he currently sits on the incumbent’s board of directors and will surely support this nomination. However, he confirmed that if CNHA were to be awarded, he would be willing to be part of the transition team, and indicated that he would do whatever he could to support a smooth transition,”
Gibson, who is president of the Hawaii Hotel Alliance, told the Star-Advertiser on Tuesday that he met with Lewis of the CNHA on May 14, but did not commit to the nonprofit.
“I was never asked to participate in the CNHA application, and I have no idea how I ended up in the CNHA application materials,” Gibson said. “I was never asked to be part of the transition team by Kuhio Lewis. We had a conversation, and he asked, ‘If CNHA wins the tender, would you be able to sustain ?’
Kiely said he was misidentified as part of the transition team for CNHA’s first RFP proposal.
“I got a call from someone last fall who said, ‘Hey, if anyone wants to talk about tourism, are you up for it? “, He said. “It was never mentioned that it was a proposal (involving) HTA, none of that. When I saw that my name was part of a proposal, I was overwhelmed.
Kiely said discrepancies in CNHA’s proposals need to be assessed.
“Somebody has to go back to HTA and say, ‘What are you doing?'” he said. “’You gave it to HVCB the first time around, and you took it out and gave it to these other guys the second time around, and some of their people aren’t even involved. together.
Kiely said such a large state contract should check all the boxes perfectly.
“If a box isn’t ticked perfectly, you stop and start again,” he said. “It’s not a small $10,000 sponsorship of a kite tournament somewhere. That’s the big deal.
