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Saturday, April 19, 2014

$229K no-bid contract for Marpi landfill

A $229,000 sole-source, emergency contract has been awarded to a private firm to provide heavy equipment for the operations of the Marpi landfill, amid allegations that Gov. Benigno R. Fitial’s “supporters” may have been one of the reasons for the no-bid contract award.

This disclosure comes at a time when a special committee is holding hearings in connection with a resolution to impeach the governor for 16 allegations of corruption, neglect of duty, and felony.

Documents obtained by Saipan Tribune show that Success International Corp. has been awarded a no-bid four-month contract to supply heavy equipment for Marpi landfill’s operations.

The emergency contract requires a monthly payment of $54,800 or $219,000 contract price, plus $10,000 in mobilization cost for a total contract price of $229,000 to Success International Corp.

Without specialized heavy equipment such as a rolling compactor, trash dumped at the Marpi landfill couldn’t be compacted and would be easily filled to capacity, among other things.

Antonio A. Camacho, acting secretary of the Department of Public Works, said in an interview yesterday that only Success International—besides previous contractor Pacific Drilling Ltd.—has a rolling compactor, along with other heavy equipment needed for the Marpi landfill operations.

Moreover, the U.S. Environmental Protection Agency or the Division of Environmental Quality may issue citations to the Department of Public Works if the latter does not comply with landfill requirements such as ensuring the Marpi landfill is compacted regularly.

Acting DEQ director David Rosario said yesterday he is not aware that DPW has a new contractor, albeit a temporary one, for the Marpi landfill. He said DEQ will communicate with DPW on this.

Skeptical

Some Capital Hill officials told Saipan Tribune they are skeptical about the sole-source contract award to Success International, located in Lower Base, saying it may be related to the owner’s association with some of Fitial’s supporters.

Jun Miao Guo, more known as “Henry Miao” and owner of Success International, said yesterday that he got the contract because his company is the only one that has the required equipment.

“I am the only owner of this company. I got the emergency contract because I am the only one with heavy equipment the government needs for Marpi,” Guo told Saipan Tribune.

He said he is no longer doing business with Tony Rasiang, one of the governor’s staunchest supporters. He said he closed another business he had with Rasiang in May this year because it’s been losing money.

The businessman said that when he was still a business partner with Rasiang, he would always see Rasiang and Felix Nogis, another staunch supporter of the governor, together. But he said he was only paying Rasiang, not Nogis at the time.

A check with the Business License Office in Dandan yesterday also shows that Success International’s sole owner and officer is Guo.

Success International Corp. is registered as a CNMI business since May 5, 2006.

It is doing business as M&R Construction/Contractor, as well as Success Auto Repair Shop and SARS Towing Service, based on government records.

Original contractor pulled out

DPW’s Camacho said “politics has nothing to do with this at all” but rather, a need to continue to operate the Marpi landfill after PDL—the contractor since 2007—decided not to renew its contract.

Camacho said PDL notified them about the non-renewal of contract on Aug. 8—a little less than a month before the Sept. 1 expiration of such contract.

“When PDL told us they’re not interested anymore, it’s only Success International that has the specialized equipment that we need for the Marpi landfill operations. That specialized equipment is a rolling compactor. But they also provide other types of equipment. The RFP [request for proposal] process could take three to four months, and we cannot allow the Marpi landfill to be non-operational for three to four months so we have to make a decision to award the contract on an emergency basis,” Camacho said in an interview at his office in Gualo Rai yesterday.

Guo said he has been keeping a close eye on the Marpi landfill heavy equipment contract for a year now, because he knows he has the equipment needed, just in case a new RFP is issued.

PDL’s Mahesh Balakrishnan, in a one-page Oct. 8 letter to Camacho, informed the acting DPW secretary that PDL “will not be providing services at the Marpi Solid Waste Facility” after Sept. 1, 2012.

“For a number of business reasons, Pacific Drilling Ltd. is not interested in extending the contract or entering into a new one,” Balakrishnan told Camacho. “We appreciate the opportunity to have been able to provide service to you under the contract.”

RFP in the works

Camacho, who has been with DPW for almost six years, rising through the ranks to become director of the department’s Technical Services Division, pointed out that an RFP is being worked on to open up the procurement process to anyone interested in supplying the needed heavy equipment for Marpi landfill’s daily operations.

Camacho said he is surprised that the emergency contract award has become “controversial.”

Camacho said once the RFP is out, anyone—including PDL and Success International—could submit proposals.

Guo said he will be submitting a bid once the RFP comes out.

The DPW acting secretary said the scope of work may also have additions, which may include maintenance work. This, he said, could also mean the cost could be higher but they expect it will be more cost-effective when all expenses are considered.

Emergency justification

Camacho wrote an Aug. 31 letter to Procurement and Supply Division director Herman Sablan, requesting the use of “emergency procurement authority” provided for in the CNMI procurement regulations to enter into a $229,000 contract with Success International.

Sablan stamped approved the emergency procurement on the same day.

In his two-page letter, Camacho said the operation of a landfill is a highly regulated activity for environmental, health and safety concerns.

“The Commonwealth provides the only authorized landfill handling approximately 40 tons of wastes each day. The placement of refuse must be done in a careful manner so as to ensure protection of the environment and compliance with the existing [U.S.] Environmental Protection Agency consent orders,” he said.

He added that proper disposal of refuse presents direct health and safety concerns not only in the containment of refuse but also to rodent and infectious wastes control.

“For these reasons, it is essential that the Commonwealth have the continuous services of qualified contractor to fulfill the required services of the Marpi landfill for a 90-120 day period,” Camacho added.

DPW’s Camacho said the requirements for daily compaction necessitates the use of a compacting roller.

He said this contract is for a short-term period of 120 days, which is not cost-effective for the investment of alternative contractors to buy this equipment in an isolated market such as Saipan.

“For these reasons, obtaining competitive prices from alternative contractors is not possible,” he said.

But Camacho pointed out that in spite of these limitations, a price for continuation of the responsibilities of the PDL contract has been obtained that is $3,900 less than the existing price, Camacho said.

He said PDL’s contract price was $58,000 a month, whereas Success International is only $54,800 a month.

The $10-million Marpi landfill is the only U.S. EPA-compliant landfill among all Pacific island territories that include Guam, American Samoa, and the Federated States of Micronesia.

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