Protest mars CUC privatization bid

One of the six qualified bidders for the Commonwealth Utilities Corp.’s power plant privatization project has cried foul over the bid process, faulting CUC for allowing another bidder to submit a proposal that does not meet the criteria set in the request of proposals.

The California-based Saipan Power Partners wants CUC to junk all the bids and start the process all over again.

In a Jan. 21 letter to CUC, Saipan Power Partners executive managing director Kent A. Larsen noted that of the six qualified bidders, only two firms actually submitted proposals that conform to the RFP criteria.

“Although told on more than one occasion not to give a response that did not meet the strictest guidelines of the RFP, a third bidder—Rolls Royce [Power Ventures]—did propose,” Larsen said. “We strongly believe that CUC is not conducting an RFP process according to the practices governing privatization, nor is CUC applying the standards set by the U.S. government with regard to privatization of government assets.”

In an interview Friday, CUC chairman Frank Guerrero confirmed that three companies indeed submitted formal proposals for the privatization project. But only two proposals have been considered responsive to the RFP.

Rolls Royce’s proposal, according to Guerrero, did not qualify because the company was interested only in building the facility. CUC wants to enter into a build-operate-transfer arrangement with the would-be contractor.

“The protest is now being handled by our consultant, Harris Group. The procurement process is not within the board’s authority: we don’t want to interfere in that,” Guerrero said.

He added, however, that CUC is not inclined to initiate a new bidding program, as requested by the protesting bidder.

With its current financial crisis, CUC cannot afford to pay Harris Group another $103,000 for its consultancy services, Guerrero noted.

CUC is looking to enter into an agreement with an independent power producer to modernize, upgrade, operate, and transfer the two Lower Base power plants.

The RFP period ended at 4pm, Jan. 7.

Guerrero said Harris Group representatives are due to arrive on Saipan on Feb. 17 to make a presentation to the CUC board of directors and management on the two bidders.

CUC has four power plants: two in Lower Base, one in Isley Field, which is not operational; and the Puerto Rico power plant, which is being petitioned by local residents to be relocated due to noise and alleged environmental pollution.

The Puerto Rico plant is run by a private company, the Pacific Marine and Industrial Corp.