Teno junks changes to local preference law

Noting the impacts it may have on projects that are already out for solicitation, Gov. Pedro P. Tenorio rejected legislative proposals to change portions of an existing law, which gives local businesses preference on bidding of projects below $5 million.

While continued preference is given to local businesses which hold Commonwealth business license for three consecutive years, Senate Bill 12-83 eliminates the dollar value of government projects to which they can enjoy inclination.

This was the same issue raised by Mr. Tenorio in his letter to the Legislature, explaining his reasons behind the rejection of the proposed amendments to Public Law 11-87.

Under SB 12-83, preference should be afforded to bidders who have possessed a CNMI business license and paid Commonwealth taxes for three consecutive years, regardless of the value of the project.

While the proposed measure guarantees that preference is given only when the bid is not more than 15 percent higher that a bid of a non-qualifying bidder, the governor felt more should be done to clarify its effective date and application to outstanding projects.

“The concern with SB 12-83 is its potential impact to 12 projects that are currently out for solicitation. Four are anticipated to cost over $5 million and may be affected by a change in the preference law,” Mr. Tenorio said.

He said outstanding projects that would cost over $5 million and are not covered under the Local Preference Law include the construction of the CNMI Adult Correctional Facility, Kagman Jr. High School, Lower Base Refuse Station, and the Marpi Solid Waste Facility.

These projects are critical to the Commonwealth’s progress, public health and public safety, said the CNMI chief executive, adding that a federal court order enjoins that construction of the adult correctional facility should be completed within a specific period of time.

The Lower Base Refuse Station and the Marpi Solid Waste Facility should also be completed promptly, as called for by an Administrative Order issued by the United States Environmental Protection Agency.

These projects would pave the road for the closure of the Puerto Rico dump, according to Mr. Tenorio in his letter to Senate President Paul A. Manglona and House Speaker Benigno R. Fitial.

“SB 12-83 may alter the status of certain parties who currently are seeking an award of these contracts and change the rules of the game in the middle of the procurement process for these projects,” he added.

Mr. Tenorio is concerned that the proposed changes offered by the legislative measure to PL 11-87 could threaten the prompt awarding and delay the completion of these critical facilities to the detriment of the community.

He pointed out that PL 11-87 provided a specific effective date while SB 12-83 does not possess the same provision other than the date it is signed into law.

It might be helpful to consider the issues that have arisen with respect to the preference law and its application to federal funds used for Commonwealth projects, said the governor.

Issues have recently surfaced which threaten to stall receipt of federal grant funds based on concerns that award of a preference in projects with certain US money would contradict federal laws that govern the use of such funds.