CUC contracts to be scrutinized

All contracts and future agreements that will be entered into by the Commonwealth Utilities Corp. for various services, including professional agreements, will now go through its board of directors for review and approval.

CHCC board chair David J. Sablan made this clear, saying it’s the board’s objective to ensure that all services to be sourced outside the agency are cost-effective for the corporation.

The newly revived board recently approved the execution of a six-year fuel contract with Mobil Oil after it identified distinct benefits to CUC and its customers.

Saipan Tribune learned that seven other expiring contracts are under review and assessment.

These include, among others, the $600,000 contract with Island Equipment Co., which supplies chlorine gas to Saipan, Tinian, and Rota, and whose term will expire on Aug. 10, 2014.

The board is also reviewing a $482,000 contract with Marianas Repair, which maintains the agency’s fleet of vehicles. This contract will expire on Nov. 17, 2014.

The economists.com’s contract with CUC, which amounts to $349,000, is also up for review. The company serves as the utility’s rate consultant and its contract expires on July 18.

The contract of the Law Offices of Deborah Fisher, one of CUC’s lawyers, is expiring this Nov. 23. The firm charges CUC $225,000.

A $105,000 contract with Joeten Motor Co. is also set for board review as the agreement expires this November.

The company that provides CUC on-land oil spill response services, Gresco Environmental, is also facing board review. Its $100,000 contract expires on July 19.

Another soon-to-expire contract is with Saipan Ice & Water Co. Inc. in August this year. The contract amounts to $64,000.

It was disclosed that the contract of the Law Office of Edward Manibusan, CUC’s administrative hearing officer, expired on May 6. This amounts to $20,000.

In an interview with Saipan Tribune, board chair Sablan emphasized the need to review all of the agency’s existing contracts.

“We asked for the listing and details of all the contracts so we can look at them. The whole idea is to see whether we will need to extend or cancel [specific contracts]. Because generally speaking, we need to evaluate each one of them to see if we can do it inside [CUC],” he told Saipan Tribune.

Sablan assured that any cost-benefit analysis provided by the management will fully be assessed and reviewed by the board to come up with a sound decision.

Recently, the board tasked the agency’s management to further study and assess the effectiveness of the corporation’s existing call center service. This came about after finding out that CUC spends $15,000 a month to pay for the services, which was contracted out to private telecommunications firm IT&E. This is a two-year contract that costs $360,000.

Citing complaints from customers, the board ordered the management to develop a transition plan for the customer service area.

The IT&E contract is expiring on Nov. 28 this year. Under the agreement, the parties have the option to renew the contract for another year. The contract provides a 90-day notice of non-renewal or termination notice.