Local preference for public works thumbed down

Gov. Pedro P. Tenorio has vetoed a proposal that will virtually shut out off-island construction companies from participating in future public works in CNMI at a time when the commonwealth is gearing up for massive infrastructure projects beginning next year.

The governor said in his letter to the Legislature he would like Senate Bill 11-74 amended to expand the scope of preference in awarding any government construction contract and not only those from the Department of Public Works.

The proposed measure, which was designed to amend Public Law 3-90 that sets the requirements for procurement of goods and services by CNMI, gives preference to local bidders to ensure that public funds spent for projects stay within the commonwealth to feed on the local economy.

“The economic crisis is upon us and we just want to make sure that public works contract are done with the benefit of a multiplier effect on the economy,” Senate Floor Leader Pete P. Reyes said in a phone interview yesterday. “I hate to see the exodus of currencies when we are in dire need for cash.”

The government is hoping to start construction of key infrastructure worth $50 million under the Capital Improvement Projects in January, activities that could provide a relief to the ailing economy.

Under the bill, any government construction projects worth less than $5 million should be given to local firms which have paid taxes to the commonwealth for three consecutive years prior to submitting bids, provided that the amount is not more than 15 percent higher than the proposal of a competing bidder who are not based in CNMI.

For projects amounting over $5 million, locally-based construction firms who have paid taxes for five successive years and whose bids are within 15 percent of the highest bid of off-island contractors will be given preference.

The measure provides that any contractor bidding for public works projects must be certified by the Department of Commerce that it is 51 percent owned US citizens or permanent residents.

But Northern Marianas-based construction companies involved in joint venture with contractors who do not meet the criteria set in the bill must submit certification that local firms will perform 51 percent of the projects.

According to Reyes, the governor was particularly pushing for amendment to a provision that limits bidding of construction projects to US citizens in the Northern Marianas for fears that this will send wrong signals to foreign companies who have been doing business in the islands for a long time.

He also dismissed that the measure was intended to allow local companies corner CIP projects. “The timing was good but it was not timed for CIP,” he said.