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OPA rules vs NMHC in vendor contract
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Posted on Jan 26 2006
The Office of the Public Auditor wants the Northern Marianas Housing Corporation to terminate its lease agreement with a copier machine provider.
According to OPA, the Housing Corporation failed to follow CNMI procurement regulations when it solicited quotations for a copier machine and subsequently entered into a contract with Xerox Corporation.
“OPA finds that the solicitation and the resulting lease agreement for a photocopier from Xerox were not in conformity with the CNMI-PR and, therefore, grants the appeal as set forth therein,” public auditor Michael S. Sablan said in a decision on an appeal filed by Xerox’s competitor, Island Business Systems & Supplies.
“The Office of the Public Auditor, therefore, grants the appeal and remands the issue to the [Procurement] Director for appropriate action, including termination or other appropriate disposal of the lease agreement, and re-solicitation for the photocopier in compliance with the CNMI-PR,” Sablan added.
On May 26, 2005, NMHC sent a one-page facsimile to Xerox, IBSS, and National Office Supply requesting quotations on a copier machine. Each company responded.
On July 13, 2005, NMHC entered into a lease agreement with Xerox for a 60-month lease of a Xerox photocopier. The five-year contract cost a total of $25,230 in base charges, or $420.50 per month.
IBSS filed a protest 10 days after the contract was signed. The protest, among other things, alleged that the lease or purchase of machinery and equipment in excess of $2,500, as in this procurement, should be procured through competitive sealed bidding as prescribed in the CNMI procurement regulations.
OPA agreed with IBSS that the photocopier should have been procured pursuant to a competitive sealed bidding because the transaction was in excess of $2,500. A letter bidding should also not be used as an alternative solicitation practice, OPA said.
Furthermore, the lease of the photocopier was not approved as an expedited purchasing in special circumstances, or through another exception to full and open competition set forth in the CNMI procurement regulations, OPA added.
