Local contractor appeals CUC decision on bid protest

A local company is protesting a decision by the Commonwealth Utilities Corp. to award a contract to a foreign company, saying the winning bidder did not follow bid requirements and should have been disqualified.

The Commonwealth Industrial Supply Co. Inc., through John C. Jones, filed the original protest on Feb. 28. CUC denied the protest on March 30 upon finding that CISCO’s claims had no merit.

CISCO appealed the decision to the Office of the Public Auditor on Monday, prompting OPA to instruct CUC yesterday to submit a complete report regarding the protest.

According to CISCO, the winning bidder violated at least four provisions of the bid for the purchase and installation of anchor bolts for one of the generating engines in the CUC power plant.

MAN B&W Singapore allegedly did not submit the required business license; excluded inbound freight on all parts and equipment necessary to perform the work; excluded import customs duties from their bid; and made CUC responsible for the entry permits for their work staff.

“Any of [these four] reasons should have automatically disqualified the bid from that company. This bid was an Invitation for Bid, not a request for proposals, and as we understand the regulations, no exceptions may be made from the published bid specifications. To do so should result in disqualification,” Jones said in the original protest.

Further, CISCO maintained that it should have been given preference in the bid, as its firm was locally incorporated and licensed.

In response, CUC executive director Lorraine Babauta said off-island businesses were not required to submit a business license for a bid. She also belied that MAN B&W Singapore committed the three other violations alleged by CISCO.

Public Law 11-87, or the “Local Preference Act,” does not apply to government corporations, Babauta said. Therefore, CISCO is not entitled to local preference under this law.

In his April 11 appeal to OPA, Jones said CUC’s policy excluding off-island bidders from the business license requirement “puts an unfair burden on local bidders.”

“Locally licensed companies pay taxes locally, while un-licensed off-island vendors do not. If you deduct the BGRT that we as a locally licensed company would have to pay on our gross billings for this bid from the amount of the bid, we would have been the low bidder,” Jones said.

He also asked OPA to verify whether MAN B&W did not commit the three other alleged violations, as CISCO did not have a copy of its competitor’s bid.

Moreover, Jones urged OPA to review CUC’s procurement history with regard to its exemption from the local preference law.

“We have heard anecdotal evidence that CUC may have actually used the local preference law in the past as a justification for using their vendor of choice. Certainly CUC cannot have it both ways,” Jones said.