Hawaii Tourism Authority grilled by senators about its multi-million dollar U.S. market contract

By Marisa Yamane

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    HONOLULU (KITV) — Hawaii Tourism Authority (HTA) officials were on the hot seat on Monday, answering questions from the Hawaii Senate Ways and Means (WAM) committee.

The topic — HTA’s U.S. Market Brand Management and Global Services contract, which still has not been settled about a year after the first request for proposals (RFP) went out.

The U.S. is Hawaii’s largest Major Market Area, with a majority of Hawaii’s visitors coming from the mainland.

WAM held the informational briefing to talk about the timeline, process, protests, and what happens next.

The Hawaii Visitors and Convention Bureau (HVCB) was initially awarded the contract, but the Council for Native Hawaiian Advancement (CNHA) protested, and HTA rescinded the award and reissued the RFP.

CNHA won the latest RFP, but HVCB then protested. HVCB is now on its second contract extension that goes through the end of March 2023.

When grilled about what went wrong, HTA officials said the decisions regarding the RFPs were ultimately up to Mike McCartney, as the director of the Department of Business, Economic Development, and Tourism (DBEDT) and as the Head of the Purchasing Agency (HOPA).

“How did we get to this point where you’re the lone attached agency to DBEDT that has absolutely no procurement authority?” Sen. Glenn Wakai, (D) WAM committee member, asked HTA officials.

“It’s my belief that we were responsible for arriving at the award of the contract in both RFPs, and at that point in time when the protest window became in effect that, at the time of protest came, he would in fact have the final say on it, and we would respond with any information that he requested. But it is my belief that that sole authority rested with him,” said HTA president and CEO John De Fries.

Afterwards, McCartney appeared before the WAM committee. He told the senators he plans to end the RFP that is under protest, and wants to issue two separate RFPs instead — one for marketing and one for destination management for the U.S. market, which would essentially split the original contract into two.

“What I’m recommending is the most sustainable option to avoid further challenging on who wins because this process is going to keep if we stay with the existing one, it could not be resolved for over a year or more even after this because it could go to DCCA and then to court, so that’s what we’re trying to resolve,” McCartney said.

Sen. Donna Kim, (D) WAM committee member, replied: “But Mike, we’re doing it because they were a mess up in the beginning. People screwed up and made this process look bad because they didn’t follow the law.”

McCartney then added: “And I could’ve done a better job of coaching them and helping them through it.”

Kim said: “But instead you made it worse.”

“If it’s going to be like that, which I don’t necessarily have a problem with, if the DBEDT director is going to make all the decisions, then we don’t necessarily need HTA then, and then DBEDT can do all the contracting, which is how it used to be,” said Sen. Donovan Dela Cruz, (D) WAM committee chair.

Upon a suggestion by the senators, McCartney said he will take the idea to cancel the RFP and reissue two separate ones to HTA’s Board of Directors for its approval or dismissal.

The heads of HVCB and CNHA also appeared before the WAM committee during the informational briefing. They told the senators that idea was previously discussed with them — that one would be for destination marketing and the other would be for destination management, with each contract worth $20 million.

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