Enron hits ‘spin’ on 1st review of project bids

A conglomerate protesting initial findings on the new power plant on Saipan has asked the Commonwealth Utilities Corporation to proceed with caution as an independent evaluation enters into its second phase amid questions on the review process.

Enron International, which is closely competing to win the $120 million contract, has hailed the decision to conduct the second round, but warned it should be a comprehensive deliberation of all aspects of the power project to address pending protests from other companies.

It also criticized what it claimed as “spin-doctoring” by CUC on the findings of the first round of reevaluation undertaken by Burns & McDonnell, noting results that ranked Marubeni-Sithe above 12 other competing firms were not conclusive.

Although the findings matched the CUC choice of the Japanese industrial giant Marubeni Corp. and its American partner Sithe, Energies, Inc., Enron said the ranking system was immaterial in the initial step as it would only determine a “competitive range” of offers which will be included in the next phase of the independent review.

“It is confusing when CUC said that they have been vindicated by the findings of Burns & McDonnell,” said David B. Howe, vice president of the Texas-based contractor.

The government-owned utility corporation agreed last week to extend the services of Burns & McDonnell so it could complete its task of choosing the potential contractor for the long-delayed project on Saipan.

The private engineering firm, based in Kansas City, Missouri, narrowed down the number of eligible proposals to nine, including PMIC-Ogden whose protest against exclusion in an in-house selection process was the basis of the fresh evaluation.

Marubeni-Sithe received “clearly superior” grade from Burns & McDonnell, while Enron and Hawaiian Electric were mixed.

While CUC has yet to set criteria by which to undertake the second round, the engineering firm has said it would involve in such areas a preparation of a bid package as well as evaluation of best and final offers.

But Howe expressed concern on how Burns & McDonnell would conduct the new phase, noting that only seven companies made it in the second round during the initial review conducted last year by CUC management.

It would be unfair for those who had submitted their “best and final offers” last year when the two companies, like PMIC-Ogden, are required to hand in their new proposals when they had already seen the others.

The Office of the Public Auditor has recommended that qualified proposers excluded from the range must be allowed to submit their “best and final offers” in a ruling last September that favored Ogden’s protest.

Meanwhile, Howe also prodded the evaluator to hold personal interview with each of those in the final list, saying the findings may end up “eschewed” unless they inquire into the specifics such as environmental impact and fuel costs.

CUC is under pressure from the government to expedite resolution of opposition against its earlier decision, which has dogged the project for the last eight months.

Touted to be the largest deal ever in the CNMI, the power plant is designed to meet increasing power demand on Saipan. It will be built under an independent power producer agreement that will last for the next 25 years.