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GEDA spent $6M on consulting contract for hospital development study

Updated: Aug 30, 2023



By Mar-Vic Cagurangan


The Guam Economic Development Authority shelled out a total of $6.1 million on a 10-year recurring contract with a consulting company tasked to develop the master plan for a new Guam hospital— a project that has been stalled due to the site lease cancellation.


Besides hospital project planning, Matrix Design Group was also commissioned to analyze existing studies related to the condition of Guam Memorial Hospital and the island's health care system.


Documents indicated that GEDA first entered into a consulting service agreement with Matrix Design Group in August 2014. The initial contract involved the development of a master plan for the Hagatna Restoration and Rehabilitation Project.


The agency continued to use Matrix’s services beyond the term of the contract indicated in the request for proposal, “which was three years with two two-year options to extend,” according to the Office of Public Accountability. “The contract should have been completed and a new RFP and contract issued by Sept. 30, 2021.”


In June 2021, Matrix received a new task order for “Medical and Public Health Services Action Plan,” which is scheduled to be completed on Aug. 31, 2023. This was followed by another task order issued on Jan. 6, 2023, which is also estimated to end on Aug. 31, 2023.


The OPA said the two task orders were non-compliant with the legal requirements for multi-term contracts, resulting in $2 million in “questioned costs.”

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The 2021 agreement produced the master plan for the administration’s proposed $1 billion integrated public health and medical complex that would replace Guam Memorial Hospital.


The project, however, hit a snag when the Navy withdrew the draft lease agreement for a federally-owned Mangilao property, commonly known as Eagles Field, where Gov. Lou Leon Guerrero proposed to build the new hospital.


Matrix also identified two other potential sites, Ypao Point in Tamuning and the Adacao Crown lands in Mangilao.


Matrix also received several new task orders to look into the status of Guam's healthcare system and medical facilities.


GEDA asked Matrix to "review and evaluate" the 2016 GMH Task Force report on "national and local healthcare trends,” and the U.S. Army Corps of Engineers’ 2019 report detailing its analysis of GMH.


Matrix was tasked to determine "if other viable improvements and upgrades were overlooked in the ACE report" and to assess "if all costs were accurately calculated and all assumptions validated particularly with regard to labor costs given the systemic labor supply challenges."


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"Since the contract award, GEDA has expended a total of $6.1 million for nine task orders based on an RFP issued almost ten years ago," the OPA said.


Besides the questionable contract extension, the auditors also pointed out that GEDA "did not make a written determination for the need of services prior to the issuance of the request for proposal" in 2014.


"GEDA contends it executed an 'indefinite delivery indefinite quantity' type contract, which is not provided for in Guam Procurement Law and Regulations and contrary to the multi-term contract referenced in the RFP and the October 2014 written determination memorandum," the OPA said.


"It is GEDA’s understanding that they were utilizing an IDIQ contract and that they could continue the use of the consultant services indefinitely as long as there was a need and had funding," the OPA said.


"Should GEDA still require the consultant services, it needs to issue a new RFP immediately and ensure compliance with all applicable procurement laws and regulations," OPA said.


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