Sablan: OPA report product of poor analysis

Former Commonwealth Utilities Corp. chair Herman P. Sablan cried foul yesterday over the Office of the Public Auditor’s report on the 2003 seawater desalination project.

Sablan said the report, which tagged him as having influenced the procurement process in favor of a proposer, was one-sided and unsubstantiated.

“It was a product of poor analysis. A lot of it was based on personal assumptions made by the analyst, who did not even talk to me or other key people who might have given him the other side of the story,” Sablan said.

“My intent here is not so much to get back at [OPA analyst manager] David Blake’s work ethic or job performance, nor to attack his character as an analyst, but to try and clear the mess he made out of my name and to make the public aware of Mr. Blake’s ‘incompetence’ as an analyst,” he added.

He listed several “facts” which he said Blake would have found out with proper research.

According to Sablan, the memorandum of understanding that he had signed with Saipan Taekwang Heavy Industry before the request for proposal was issued had the approval of majority of the CUC board of directors.

He also said that he never met Taekwang officials until two months before his election as CUC chairman and the signing of the MOU. “OPA made a mistake in assuming that [I] had known or had met the company several months before that,” he said.

Sablan also said that the MOU was intended to initiate a pilot desalination project for the Garapan district area. The small-scale project, he said, was intended to serve as an experiment for a larger desalination program.

However, immediately after the MOU signing, the board decided to put out an RFP because other companies showed interest in the project.

According to the OPA report, Taekwang appears to have been given an 11-month head start in the bid. OPA noted that the firm had submitted an unsolicited proposal 11 months before the request for proposal was issued. This unsolicited proposal later took the form of a memorandum of understanding and the key elements of both the proposal and MOU were later incorporated into the RFP.

Sablan also said that the replacement of CUC’s then legal counsel had nothing to do with the attorney’s position on the desalination project. “[He] voluntarily resigned because he refused to accept a small reduction on his legal fees,” he said.

Blake said in a special report that multiple and serious violations of CUC procurement regulations were committed in the bid for the desalination project.

“Specifically, CUC: (1) did not treat all proposers in a fair and equitable manner, (2) did not give adequate public notice of the project, (3) did not maintain the confidentiality of the individual proposals, and (4) the procurement selection process was flawed,” Blake said in a letter addressed to Gov. Benigno R. Fitial.

Blake wrote and signed the Jan. 13, 2006 letter on behalf of public auditor Michael S. Sablan, who had recused himself from the case due to conflict of interest.

According to Blake, the source selection process appears to have been “tainted by what could be construed as the outside influence of the chairman of CUC and other faults.”

The analyst also said that the majority of the CUC Board of Directors, specifically Sablan, ignored numerous points where individual board members, outside parties, and members of the CUC management team offered prudent and responsible advice.