Auctioneers cry foul over dairy selloff

Ron Alleva of Anchorage-based Grubstake Auction said he will officially protest the selection process he believes effectively shut out local bidders. He said he is organizing a boycott of Alaska Grown products until a new bidding process for the dairy equipment is allowed.

"There's a distaste in our mouth that if we (local auction companies) are not qualified, then why should we eat your potatoes or carrots?" Alleva said Monday.

The Creamery Board on Saturday selected a joint bid by two California firms -- Tauber-Arons and Rabin Worldwide -- to auction off the remaining Mat Maid inventory. Company buildings and land in Anchorage and Palmer will be disposed of separately.

One of the four board members, Palmer farmer Ben Vanderweele, is a well-known commercial grower of potatoes and carrots. Another, Ralph Carney, runs an Anchorage potato chip-making company that uses local potatoes.

Carney on Monday said the board made no attempt to shut out local companies from the bidding.

Other firms joined Alleva to criticize the selection process, including North Pacific Auctioneers in Eagle River, Alaska Auction and Denali Auction in Anchorage and Alaska Statewide Auction Service in the Matanuska-Susitna Borough.

All five are asking for the sale to be put out for bid again. Their main complaint centers on a lack of notification that the state was looking for an auctioneer.

The board posted no public notice it was taking bids and made no attempt to notify local firms, as is common with most state sales, Alleva said. Rather, most of the companies found out about the sale only at the last minute through a newspaper article or word of mouth, he said.

He and other company owners also said the state provided few criteria as to what was expected of the bidding firms, an omission they described as "unusual."

One of the local firms also complained the California companies did not have valid Alaska business licenses although, according to state records, Rabin Worldwide renewed its license Monday.

Alleva said his firm submitted a bid after reading about it in a newspaper article.

Steve Childs, who runs Alaska Statewide Auction Service, said he never got a chance to bid. He learned of the proposed sale only a day before the deadline and was busy with two other projects, including selling off what remains of the now-defunct Hooters restaurant in Anchorage.

"I didn't have the time to put one (together)," he said.

Duane Hill, a co-owner of Alaska Auction, said he was also shut out because he learned too late about the auction.

All three said the complaints were not sour grapes; they are about being able to bid on the project in "a fair and equitable manner," Childs said.

The sale is of more interest than most because of the value of the inventory at the now-defunct company. An appraisal done for the state pegged the value at about $2.5 million, Alleva said.

The prices are not guaranteed, but an auctioneer that, for example, charged a 10 percent commission could stand to gain a relatively hefty $250,000.

Carney, in an interview Monday, said the sale was well-publicized through newspaper articles about the dairy and added that board members didn't feel the need to take extra time to do a formal solicitation process.

"We were pretty comfortable that we had a good pool to select from. We had a pretty representative pool of bidders," he said. "We don't feel it was appropriate to waste time."

He also noted three bids came from local auction companies. Calls to verify that with the state Division of Agriculture Monday went unreturned.

Carney also said that Matanuska Maid is not required to follow state procurement rules. Matanuska Maid is state-owned but is run by a private corporation, the Creamery Corp., which means a formal solicitation process is not required, he said.

Even so, Hill said, the board should have advertised the sale given that Mat Maid is a state company that has received state funds.

"As far as I'm concerned, it's a state asset. It belongs to the people of the state of Alaska, and for them at least to not give us an opportunity to bid, it's not right," he said.

Find S.J. Komarnitsky at adn.com/contact/skomarnitsky or 907-352-6714.