Flaws cited in CUC green energy procurement

Efforts by the Commonwealth Utilities Corp. to obtain renewable energy sources may hit some delay after the Office of the Public Auditor found the procurement process to be flawed.

OPA said that while there was nothing improper about CUC’s choice of procurement process, the criteria set forth in the “request for proposals” were not specific enough to ensure a fair selection. OPA ordered CUC to review and modify the RFP to comply with CUC’s procurement regulations.

The decision was made on an appeal which Telesource CNMI Inc. filed with the OPA in February 2008. The appeal came after then CUC executive director Anthony S. Guerrero denied the company’s protest regarding the RFP for grid supply renewable energy generation projects in the CNMI. Guerrero declined the protest for two main reasons. First, Telesource was not an “aggrieved party” and thus lacked standing to protest. Second, the protest was untimely.

In an eight-page decision, OPA ruled that Telesource, as a prospective proposer, was in the position to file a protest based on alleged improprieties that are apparent before the deadline for bids or proposals.

OPA also said that Telesource’s protest was timely in that it was filed well within the deadline for submission of proposals.

However, OPA disagreed with Telesource’s claim that procuring alternative or renewable energy must be done by competitive sealed bidding, as opposed to competitive proposals. OPA maintained that the CUC director had the authority to use the RFP process, and his decision to use such process was justified.

Yet, OPA said, CUC violated procurement regulations by merely listing factors that will be evaluated in the RFP, without stating how they weigh against each other. “Merely listing factors that will be evaluated in an RFP with no statement of their relative importance is typically a questionable technique for disclosing the relative importance of the factors,” OPA said.

CUC has received proposals from six different companies that want to provide renewable energy to the Commonwealth. Although the submission period has ended, no contract has been awarded yet.

CUC executive director Antonio Muna said yesterday that the evaluation committee will meet later this week to discuss OPA’s decision and its implications on the procurement process.

The six proposers were identified as New Seoul Corp. and Commonwealth Industrial Supply Co. Inc., both located on Saipan; OCCEES Ocean Engineering & Energy Systems of Hawaii; Leminiscate Investment LLC of Florida; United Systems Engineering Co. Ltd. of Taiwan; and Lucid Energy Technologies LLC of Indiana.

CUC may select more than one contractor.