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Guam’s emergency power deal fails to stand up to attorney general's scrutiny

Updated: Mar 19



By Pacific Island Times News Staff


The Guam Power Authority’s temporary power rental agreement with a private vendor remains on hold due to a flawed procurement contract.


Noting missing clauses, Assistant Attorney General David Rivera last week sent the contract back to GPA for correction.


GPA struck a deal with Aggreko International Projects Ltd. in January for 20mw of temporary power within 100 days.


The Aggreko contract was one of GPA’s emergency power projects that would bridge the gap in Guam's power capacity while awaiting the commissioning of the Ukudu Power Plant, which is anticipated around September.


Earlier this month, Gov. Lou Leon Guerrero signed into law Sen. William Parkinson’s Bill 206-37, which waives certain procurement rules to speed up GPA’s $25 million deal with Aggreko. 


In a March 15 letter to Marianne Woloschuk, GPA legal counsel, Rivera identified contract terms required by Guam law that were not stated in the Aggreko contract. These include prohibition against gratuitieskickbacks favors and contingent fees; a statement concerning ethical standards and prohibition against employment of sex offenders.

 

Rivera also noted that the dispute clause in the contract, which sets 30 days for dispute resolution, “appears to be inconsistent with Guam law.”


 “Guam procurement law gives the procurement officer 60 days to provide a decision on a dispute,” he said.

 

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Rivera also noted that the contract's provision for arbitration in New York to settle any disputes between the parties was not consistent with local law.


Guam law does not provide for either mediation or arbitration for disputes 

relating to the government of Guam contracts,” he said.

 

Another missing element is a clause "that acknowledges the obligation to pay their employees on Guam who  are delivering services to Guam in accordance

 with the U.S. DOL Wages and Benefits Determination."

 

Because this is a multi-year contract with a renewal clause there must be a stipulation to apply the Wage and Benefits Determination for Guam promulgated by the U.S. Department of Labor on a date most recent to the

renewal date,” Rivera said.

 

Parkinson’s Bill 206-37, which is now Public Law 37-81, was enacted to facilitate GPA's procurement of temporary power to deal with the current bout of load shedding.

 

“GPA is not asking to be exempted from all procurement laws for all time. Only

once, and only for this temporary power project,” GPA General Manager John Benavente said in a letter to the legislature on Feb. 22.

 

“There is no way around the fact that load shedding will go on for two more years without additional capacity,” he added.


The measure was requested by GPA based on prior procurement delays that resulted in losses of up to 102MW that are not available for customers, Benavente said.


"These delays are costly and have left Guam with a significant power deficit that

GPA continues to address," GPA said in a press release. "Swift action is needed to prevent further disruptions to Guam's power supply."




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