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FBI, OPA are probing CISCO deal
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Posted on Jul 14 2008
Federal and local authorities have begun investigating a sole-sourced contract signed by the Commonwealth Utilities Corp. for the repair of one of its Saipan power plants.
CUC executive director Antonio Muna said yesterday that the Federal Bureau of Investigation and the Office of the Public Auditor are looking into the contracting arrangement between the utility and the Commonwealth Industrial Supply Co. Inc.
In 2006, CUC hired CISCO to fix the six engines at Power Plant II in Lower Base. To date, only one engine is operational. The FBI is involved in the probe because the $885,000 used to pay CISCO came from the federal government.
Muna said the investigation had been ongoing before he took over CUC in May 2008.
Public Auditor Michael S. Sablan declined to comment on the investigation.
CUC entered into the CISCO contract without soliciting bids or proposals from any other company. Lt. Gov. Timothy P. Villagomez, according to the governor’s state of emergency declaration, approved the contract on May 14, 2006.
In a letter justifying the sole-source procurement, then CUC executive director Anthony Guerrero said the repair of the Power Plant II engines was necessary to increase CUC’s reserve power capacity.
“Because CUC does not currently have reserve power, we consider this situation an emergency and ask that CUC be allowed to issue a contract immediately to CISCO, a qualified on-island business, for these urgently needed services,” Guerrero has said.
CISCO’s plan was to increase power production from Power Plant II to a minimum of 10 MW of backup power. The goal was to rehabilitate Power Plant II so as to allow units at Power Plant I to be shut down for much delayed overhauls. The overhauls were necessary to improve the fuel efficiency and generation capacity of the engines.
CISCO’s work at Power Plant II has now been suspended. The only operational engine, which has a capacity of 2.5 MW, is producing 1.8 MW of power.
