Mat-Maid loses Fairbanks milk contract over preference mixup

Posted: Sunday, July 06, 2003

FAIRBANKS (AP) The Fairbanks school board awarded its milk contract to a local distributor after determining that Matanuska Maid dairy of Anchorage was not on the list of bidders meriting a preference for producing Alaska agriculture products.

The board overturned an administrative recommendation to award the district's milk contract to Matanuska Maid and chose Quality Sales Food, a Fairbanks distributor.

Quality Sales had contested the Fairbanks North Star Borough School District's decision to award the contract to Matanuska Maid.

Quality Sales had the lowest bid of the three companies that responded to the district's request for proposals to provide the school lunch milk and other dairy milk products.

However, Quality Sales slipped to second place after the district applied a state-mandated 7 percent bidder preference to the Matanuska Maid bid. That preference applies to agricultural products harvested in Alaska.

Quality Sales president Gary Nance and his attorneys argued that Matanuska Maid was not eligible for the preference because the company was not on the state's list of eligible companies at the time of the bid.

Cory Borgeson, one of Nance's attorneys, told the board Tuesday that Matanuska Maid's absence from the list made the bid process ''inherently unfair,'' since Nance may have gone into the bid process thinking he was not competing against anyone with that 7 percent preference.

Matanuska Maid officials did not attend the meeting. In a memo to the district, company president Joseph VanTreeck wrote that the renewal paperwork to keep the company on the preference list was misplaced.

VanTreeck could not be immediately reached Thursday morning.

An attorney for the school district agreed that the omission of Matanuska Maid from the list was an administrative error and left it to the board to decide whether that omission warranted awarding the bid to Quality Sales.

''The state law required for the bidders to be on the list and the bidder was not on the list,'' said board member Joe Blackburn.

Board member Jennifer Schmidt said a company that says it meets the requirements for a preference ought to make sure it does or risk losing a contract.

While Nance said he supports local, and even state, bidder preference, he said the profit margin in food service is low and a 7 percent preference is too high. The last time he bid on the milk contract, the district had a 5 percent local bidder preference in place, Nance said.

Now, with the local bidder preference off the books, that state preference has become more onerous, he said.

''Having 7 percent every time is unfair to local businesses,'' he said.

Nance said losing the contract, which he has held for three years, would have meant some cutbacks at his company.

''It wouldn't have put us out of business but it is just one more thorn in your side,'' he said. ''It helps me keep employees for the whole winter. We have two drivers that are dedicated to those routes all winter long.''

Matanuska Maid can appeal the decision.

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