Saturday, February 4, 2023

Court of Appeals validates discount store’s change of operator to military

The Court of Appeals ruled in favor of the Institutional Trust of the National Guard (FIGNA) in the selection of a new operator of discount stores for the military, a process in which it ended a 14-year relationship with the company Castro Business.

The decision not to renew the contract resulted in the temporary closure of 10 stores while the selection of a new operator is completed. However, the closure of the complex was extended for seven months due to a modification of the administrative decision requested by four of the six bidding companies, alleging that Juan Reynoso-owned Quality Transport and Distribution LLC Figna acted arbitrarily, arbitrarily and improperly when selecting Cabrera.

“This is a very important process for Figna because this is their income generating area. Figna needs to feed those trusts through these military stores. The special law and Treasury’s joint rule RFP (Request for Proposals ) allow a special process for creating and calling participants.Figna’s lawyer, José Barria Fernández, responded in a telephone interview with El Nuevo Día.

Figna estimated the stores would be able to reopen in mid-February, while it estimated they would stop earning $2 million in rent from July 1 through the following month, remaining closed to about 30,000 authorized members. Closed in peak consumption months due to Christmas festivities.

The termination notice was issued on May 17, 2022, two weeks after an audio leak of Castro Business owner Ricky Castro admitting that he deposited his donations into accounts of fictitious organizations and the National Guard Exchange Name of, the name under which it does business. These donations were, ultimately, to the super PAC Save Puerto Rico, which supported the election campaign for the governorship. Pedro Pierluisi and whose president, Joseph Fuentes, pleaded guilty to participating in a scheme to conceal information and defraud the federal government.

Castro was represented in negotiations to renew the contract by attorney Andrés Guillemard, Governor Pierluisi’s brother-in-law, according to court documents from a lawsuit over alleged breach of contract. That civil process is still pending for resolution.

Beria Fernandez explained that the Castro business pays $450,000 per month in rent, while the new contractor will pay $500,000 per month, plus 6% of the income when it exceeds $40 million in gross sales per year. Lawyers acknowledge that sales have never exceeded that amount, but they aspire to.

In a December 20 decision regarding administrative review, the appellate court determined that contracts to operate stores are expressly exempt from the application of the General Services Administration Act (ASG) to the centralization of procurement. 73 of 2019), contrary to what the companies had claimed.

“In this case, FIGNA is not making purchases, it is giving space for the operation of some stores under concession,” Barria Fernández responded.

In this regard, the Administrator of the ASG, Carla Mercado, indicated that, although the process carried out by the National Guard is exempt from Law 73 of 2019, the auction or RFP procedures are regulated in the executive branch by that law, which The opposite is argued in the sentence. He commented, “These types of decisions should be restrained by the current rules, because they affect legal transactions that directly affect government functions.”

The Court of Appeals also validated Figena’s procedures against six other approaches from the companies.

Nation World News Desk
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