CUC: Over $400K had been paid to DCM

The Commonwealth Utilities Corp. has paid over $400,000 under its failed contract for engine repairs at Saipan’s main power plant.

CUC executive director Antonio Muna disclosed yesterday that the Guam-based DCM Group received a mobilization fee of $268,000 and an additional $145,000 for work done on the eighth engine at Power Plant 1.

Muna also said the DCM Group has sent CUC additional billings amounting to $300,000 to $500,000. But these billings are still under dispute. CUC believes it has been overcharged to the tune of hundreds of dollars.

CUC terminated the $5.1-million deal last week after the DCM Group failed to repair the generators, as required by the contract. The termination has prompted questions from government officials and community leaders about the possibility of recovering some funds from the DCM Group.

“As far as getting any money back, really, at this point, the attorneys need to look at what rights we do have to recover any money that we have paid already,” said Muna.

Meanwhile, CUC’s next move is to launch another procurement process for the work left undone by the DCM Group. Muna said the utility this week will formally seek proposals from companies interested in repairing two of the generators—Engines 7 and 5—at Power Plant I.

Muna said CUC hopes to get interested firms to respond within 15 to 30 days of the request for proposals being issued. “We definitely want that moving forward as soon as possible,” he said.

Funds for the new contract will come from the $1.8 million remaining of the $6.5 million federal money reprogrammed to CUC.

CUC hired the DCM Group in December 2007 to repair seven of the eight generators at the main power plant in Lower Base. Under the $5.1 million contract, DCM Group was to complete the rehabilitation by June 2008. To date, however, five of the engines are still down.

Muna notified the Guam-based DCM Group Inc. of the termination in a letter on Thursday, July 10, 2008. The termination came about a month after the utility issued a notice of default to DCM for falling behind schedule.

The DCM Group has said it is having problems getting the needed parts to repair the engines. The contractor asked for more time, but Muna denied the request.

“The continuing failure of DCM to meet its contractual obligations and the resulting delays in providing electricity to the citizens of the Commonwealth is unacceptable,” Muna said. “DCM has not cured its default of [the contract]. That contract is terminated.”