OPA: CUC decision on denial erroneous

The Commonwealth Utilities Corp.’s made a wrong decision when it denied the protest of a losing bidder earlier this year, according to the Office of the Public Auditor.

In a decision released yesterday, public auditor Michael Sablan said that while the whole bid was eventually cancelled by the utility firm recently, the fact remains that CUC’s ruling on the protest filed by J&A Enterprises was incorrect. CUC had ruled that the protest was “untimely” filed.

“J&A’s protest filed with CUC was timely. The decision of the [CUC] executive director therefore, appears to have been based on consideration of the wrong factors and was erroneous,” said Sablan.

OPA also agreed that CUC’s selected bidder, JMI Industrial Systems Inc., failed to comply with bid specification and that the awarding was contrary to rules.

OPA cited that CUC opened the bid for submersible pumps on Jan. 8, 2004, and awarded the contract to JMI on or about March 26, 2004.

CUC notified J&A of its non-selection through a letter dated March 29, 2004.

J&A filed its protest with CUC on April 2 and a detailed information on April 22.

On May 6, CUC executive director Lorraine A. Babauta denied J&A’s contract as untimely, citing that the company should have known that on Jan. 8, the facts pertaining to the pumps to be supplied by JMI were contained in its bid package.

“J&A Enterprises did not submit its protest until after CUC had awarded the contract despite the fact that the information the protest is based on was available on Jan. 8, 2004,” said the director.

On May 20, J&A appealed the decision with the OPA.

Sablan, in the ruling, said that J&A had no way of knowing that CUC would award the contract to JMI.

The timeliness of the filing of a case, he said, is not measured from the bid opening but “until the protester has learned of the agency action or intended action that is inconsistent with what the protester believes to be incorrect or adverse to its interest.”

“J&A therefore cannot be charged with the knowledge of the basis for its protest until CUC took a position adverse to it [which was on March 29],” OPA said.

Nevertheless, OPA said that since CUC cancelled the contract award to JMI last July 16, “no other remedies are available.”

The CUC told the OPA that it terminated the contract because “pumps were not constructed of the material set out in the specifications and therefore, CUC rejected the goods received from JMI as non-conforming.”

OPA said the cancellation is allowable under CUC’s procurement rules.