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Court rules Government broke the law on US postal deal

The Government broke the law in partnering with a US company to create an overseas online shopping and shipping channel, the Supreme Court has found.

Puisne Judge Larry Mussenden has also called for the Minister for the Cabinet Office to supply details about its partnership with Access USA Shipping LLC involving the Bermuda Post Office before a decision could be made on quashing the contract.

The ruling came just over a year after the Government attempted to block the judicial review into how it signed the deal with the Florida-based company without putting the contract out to tender.

The case was brought by the local courier company Mailboxes Unlimited, which sought to halt the partnership after the Government signed with the overseas firm before inviting Bermuda companies to submit bids.

Mailboxes president welcomes decision

Kenny Thomson, president of Mailboxes, said the Government had made a decision to “actively compete with Bermudian businesses, our private sector”.

“Mailboxes was admittedly taken-back by this announcement, so we began asking questions in public forums.

“As it became clear that the Government would not comply with our requests, we were left with just one option.

“Mailboxes is a 100 per cent Bermudian business and, as part of this community, we desire to live in a Bermuda where our leaders are transparent and accountable.

“Over the last two years, we shouldered the financial and reputational impact of this legal proceeding.”

Mr Thomson added that the company had incurred a $30,000 legal bill.

“The Bermuda Government is now mandated to reimburse Mailboxes for its legal costs. While this might appear as a cause for celebration, it marks a sad day for all Bermudians.

“Every taxpayer, including Mailboxes, will bear a portion of this bill. It represents $30,000 that could have otherwise been allocated to mend our roads, enhance our education system, or fund firefighting services.”

MyBermudaPost was announced in November 2020 as a public-private partnership by Wayne Furbert, then the minister, who said it would allow local postal customers to take advantage of free shipping services and have their packages consolidated in the US and forwarded to Bermuda.

Kenny Thomson, the president of Mailboxes, quickly hit back that the deal meant that the BPO was effectively supporting an overseas company in direct competition with island businesses.

Mr Justice Mussenden’s August 1 ruling found that the Government’s decision was unlawful.

He faulted the minister’s announcement of the deal in 2018 under the Government’s own Code of Practice for Project Management and Procurement, after the government website carried a Request for Information in August 2018 on “purchasing options for online cross border and global shopping”.

Mr Justice Mussenden noted: “It was expressly stated that the RFI was not a formal competitive bidding process.”

The minister announced a soft launch of the service the following month in the House of Assembly, telling MPs it would reap $600,000 annually for the BPO — a figure that was not supported by the Budget report for 2022 predicting an increase from $203,000 revenue to $553,000 from customs declarations fees, due to MyBermudaPost.

Mailboxes filed for judicial review in November of 2021, with the Government’s counsel arguing that the application was too late.

Eugene Johnston, for the Government, told the court that Mailboxes had missed the deadline, while Peter Sanderson, for the firm, said the deal with Access USA Shipping had only been announced in the House in March of 2021, and that the island’s press had failed to report it.

Mr Sanderson told the court it could not be reasonable to expect the public to read through the voluminous Hansard reports of parliamentary proceedings “on the off chance that there may be something of relevance to them”.

Mr Justice Mussenden also found that the Government had not revealed the actual date upon which the contract began — although he allowed that Mr Johnston had revealed “albeit begrudgingly” in court that it had been signed on May 19, 2021.

As a result he dismissed government’s argument and found the application for leave was on time.

Mr Sanderson further argued that the Government had failed to abide by the terms of a low-value contract.

Mr Justice Mussenden concluded: “In my view the application for judicial review on the ground of illegality or unlawfulness succeeds for several reasons.”

He added: “I make the declaration that the decision to enter into the partnership was unlawful.”

He then found that the Government had failed to abide by its own procurement code.

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Published August 07, 2023 at 8:00 am (Updated August 07, 2023 at 8:01 am)

Court rules Government broke the law on US postal deal

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