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Guam businessman says Matrix must return $6M to the people of Guam

GEDA to cancel contract with consulting firm

Peter Sgro

(This article has been updated with comments from GEDA.)

By Mar-Vic Cagurangan

The hospital development and health care studies conducted by Matrix Design Group with a price tag of $6 million could have been done at a much lower cost had the consulting contract been properly bid out, according to a Guam businessman.

Pete Sgro, president of International Group, said the Arizona-based Matrix Design Group “should pay back the people of Guam for those studies.”

The Office of Public Accountability reported last week that the Guam Economic Development Authority has paid Matrix $6.1 million through a 10-year recurring contract to develop the master plan for a new Guam hospital and analyze existing studies related to the condition of Guam Memorial Hospital and the island's health care system.

“It's not right the people of Guam and Department of Defense get stuck with a $6 million bill especially now when people are still suffering from the typhoon,” Sgro said.

Sgro said his company was ready to submit a response to a request for proposals for $350,000.

In response to the OPA report, GEDA Administrator Melanie Mendiola said the agency will cancel its agreement with Matrix.

"The contract did not have an expiration date. The issue in fact was that the contract in effect was inconsistent with the (request for proposal)," she said.

"GEDA concurred with the OPA that inconsistencies should not exist between the RFPs and resulting contracts, and as such will terminate this contract ASAP."


According to the OPA’s report, the Matrix contract was an extension of a 2014 agreement that originally sought the development of a master plan for the Hagatna Recovery and Rehabilitation Project.

Mendiola said the total of $6 million paid out to Matrix included $997,000 for the Hagatna project master plan, $996,000 for a fiscal impact assessment of the military build-up, and $1.6 million for the Medical Action Plan, which was a federally funded study by the Office of Economic Adjustment.

"So, to state that Matrix should return any money to the people of Guam, it would actually be to the OEA, as we didn't spend the people of Guam's money on the Medical Action Plan," Mendiola said.

She also explained that the contractor commissioned for the study must be OEA-approved.

"So while Mr. Sgro may be of the position that even $1.6 million was too high and he could have done it for $350,000 as he stated, Mr. Sgro did not have an active contract with GEDA, Matrix did. If we issued a separate RFP just for the hospital, we would have also needed the go-ahead from the OEA on the selected contractor," she added.

Sgro, however, said neither Matrix nor any government official tasked to plan a new Guam hospital had “any experience in any healthcare discipline required to do any part of a study” for the project.

Mendiola said Matrix met the requirements of the task orders issued from 2019 to the current time.

"We cannot speak to how satisfied the previous administration was with their performance from 2014 to the change in administration," she said, noting that Matrix's initial contract was negotiated by the previous administration.


“I doubt the GEDA board ratified those contracts, so its legality under elementary contract law is questionable. GEDA's purpose is to develop our economy not the economy of Arizona,” Sgro said.

“It's easy to just say you don't have to bid because we will just give you more money, extend your contract because it's not our money. How could all of them justify their time when Guam Memorial Hospital continues to fall apart and not be safe for patients, their families, its nurses, doctors and staff,” Sgro said.

He said the $6 million in public money awarded to Matrix “could have easily funded a new state-of-the-art labor and delivery department" to replace the existing maternity ward at GMH that is stricken with mold.

Sgro, who founded Guam Regional Medical City along with community stakeholders, said any public hospital-related contract must be awarded to the lowest-priced and most qualified bidder.

“My resume not only includes GRMC but a needs assessment on the Chuuk State Hospital in Weno that the federal government bided out,” Sgro said.

He said he was part of a team that spent five days in Weno to inspect the Weno medical facility.

“The team consisted of healthcare design professional architects, healthcare industry consultants with policy-making experience, electrical and mechanical engineers, and a nurse with a master’s degree in business,” he said.

“Every single day we were picked up by a federal representative from Pohnpei in an old van touring and in meetings with Chuuk hospital members and Weno government and private sector stakeholders. The federal government awarded the contract to do that study to a Japan-Guam joint venture,” he said.

“We stayed at the Truk Stop motel, not a resort. I don't know how much everyone else got paid but I was later paid $50,000 for my work,” Sgro said.


Matrix’s contract produced the master plan for the administration’s hospital project initially proposed to be built on a Navy-owned property, known as Eagles Field, in Mangilao, where the Missile Defense Agency is also planning to build radars.

“No title report was done to determine the historic ancestral land titles. No research supports those land claimants be ignored,” Sgro said. “What did Matrix do to support Mangilao for a medical campus?”

“Did they consider falling debris risks from a missile? Why did they ignore our doctors who essentially summarized that people would die by the time over 80 percent of them with offices in Tamuning get to a Mangilao hospital from Tamuning. I did not see one census study of every single village population or ratios of the highest probability of lives saved nor reference to Naval Hospital providing care to our people in the south."

The Eagles Field site has since been taken off the table after the Navy canceled the lease with Gov. Lou Leon Guerrero.


Sgro said planners of the proposed new hospital could take a cue from the Guam Health Development Foundation, which drafted the master plan for GRMC at no expense to Guam taxpayers.

“It took about eight months just to select that 6-acre property where GRMC is now located and up to 15 months just to design it, not counting two years to construct it,” he said.

Guam’s taxpayers are now shouldering the $6 million in public funds paid to Matrix, Sgro said.

“The people paid for it and they deserve not any study but one that would foster the development of a hospital designed specifically for the healthcare needs of our people not the people of Arizona,” he added.

Mendiola said she welcomed Sgro's criticisms.

"I see his commentary as constructive and meant to open the doors to communication and solutions versus obstructing the process," she said.

"I have tremendous respect for Mr. Sgro as he has spoken with me once at length concerning the process of getting GRMC built. Mr. Sgro shared that he gave his blood, sweat, and tears to GRMC just as we give ours to the medical campus project."

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