Wuxi Manufacturer Loses $6 million Contract Due to Lack of Qualification

Via saipantribune.com

The Commonwealth Utilities Corp. legal counsel James Sirok told Saipan Tribune that he warned the CUC board of red flags associated with the contractor in the emergency procurement of an 8- to 10-megawatt diesel engine.

General Pacific Services Marianas Inc. was one of four respondents to a request for quotation, or RFQ, in the emergency procurement of the engine.

The board awarded GPSM the $11.7-million contract to supply a diesel generator to CUC last Feb. 14, 2017. According to Sirok, it was agreed that CUC and GPSM would begin discussions on Feb. 28, 2017 based on prior discussions with the board.

The CUC legal counsel told Saipan Tribune that he, along with the vendor selection committee, pushed for ending negotiations with GPSM to the CUC board.

“It was me that notified management that there were problems with GPSM and that we probably should not move forward with the contract,” said Sirok.

According to Sirok, he communicated with selection committee chair and CUC deputy director William Gilmore his doubts with GPSM.

“Quite frankly, my opinion is that [we should not move forward with GPSM]. As a result of him seeing that communication, [Gilmore] wrote [a recommendation urging the CUC board to end negotiations with GPSM],” he said.

In a letter dated March 3, 2017, Gilmore wrote to the CUC board that the vendor selection committee is recommending ending negotiation of terms with GPSM and reopening negotiations with Wartsila, another respondent to the RFQ.

According to Gilmore, the CUC board pushed through with GPSM, despite that fact that the engine provided by Wartsila was less than GPSM by $1.7 million; did not include an excise tax payment requirement in their price; is more fuel and lube oil efficient, saving hundreds of thousands of dollars per year; and had a lesser cost of maintenance spare parts for the 36,000 hours required for the engine.

The only drawback, according to Gilmore’s letter, was that Wartsila would take 10 weeks longer than GPSM’s engine delivery.

According to CUC reports, respondents for the RFQ include GPSM, Wartsila, Wuxi, and Aggreko.

The exact price for GPSM’s engine is $11,779,200. Wartsila is $10,085,629, and Wuxi is $6,528,359.

Wuxi, a Chinese company, was the least qualified of the respondents, according to CUC reports.

Aggreko is a generator rental company and was not considered by the CUC board as it was buying to own.

CUC formally withdraws genset RFQ

CUC executive director Gary Camacho told Saipan Tribune that the “CUC board has voted to cancel RFQ 17-001,” the RFQ that associated with the purchase of the replacement engine, which RFQ was won by controversial GPSM.

Both oversight hearings conducted by House and Senate Public Transportation and Utilities Committees last Tuesday ended with the two committees recommending the CUC board to rethink the procurement of the replacement engine due to possible “unlawful and unethical” actions of the board and the legitimacy of the contractor, namely General Pacific Services Marianas, or GPSM.

“The board has taken the recommendations of both the Senate and the House members. However, CUC would again reinitiate the effort to procure a replacement engine to address [the] urgent need of power generation,” said Camacho.

Camacho told Saipan Tribune that there were good responses by vendors in the past and confirmed that there was interest present. As of now, the focus of CUC is to go through the procurement process correctly.

“Moving forward in dealing with this, CUC definitely wants to do this correctly. We want to ensure that we do it in a matter that does not impede the acquisition of this needed engine,” said Camacho.

According to Camacho, the number of hotels connecting to CUC and the increasing number of developments justified the emergency situation.

Imperial Pacific Resort Hotel and Kensington Hotel would be connecting directly to CUC.

“To try to achieve a 40-megawatt reserve capacity, the power generation personnel believe that we need this engine,” he said.

Oath-taking was voluntary

Sirok also clarified with Saipan Tribune that he did not tell the board members not to take oath.

“What I indicated to the chairman of the senate Public Transportation and Utilities Committee is that the board members are not going to say anything until I make a statement. I did not tell them not to take the oath,” said Sirok.

According to Sirok, the Senate PTUC “could not require someone to take an oath unless they advise that person that they have the opportunity to have a legal counsel present during the time that they are providing testimony under oath.”

Sirok pointed out that the Senate PTUC failed to provide such advice.



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