On March 11 a superior court judge decided Morrico Equipment Corp. had strong enough evidence for the court to interfere for the second time in the government’s purchases of emergency vehicles from Morrico competitors.
Allan Morrison president of Morrico Equipment Corp. — whose company was involved in the bid process for six ambulances and three fire trucks — says the protests and court injunctions were inevitable.
Morrison is frustrated by what he calls a flawed procurement process in general and the way government agencies handle requests for proposals in particular.
In an exclusive interview with the Journal Morrison said he has decided to talk frankly about the steps he has taken. His reasons include a decision to reassure his customers and the community following adverse publicity and a desire to see improvements in the government of Guam’s procurement process.
Morrico has been involved in several legal actions involving procurement.
In 1999 Morrico protested a 1998 award for the Port Authority of Guam’s purchase of five side loaders — which lift containers — and lost.
Morrison said “It was argued by the port it was in the best interests of the territory not to cancel the order. We lost the court case on the grounds that we also did not make the [other] vendor part of the law suit.”
He said “When you protest everything is supposed to stop but it never does. In procurement cases every vendor will tell you ‘These are the tricks the government will play to support its position.”
In December 2001 Morrico took the Department of Public Works to court concerning a bid for nine trash trucks. Named in the suit is Jesse G. Garcia director of the department at the time Frederico Q. Santiago then chief procurement officer for the government and the General Services Agency.
A tortuous process of bid openings cancellations re-bids stay of procurements rejection of bids Freedom of Information Act requests from Morrison testimony before the Guam legislature by Garcia continued from Feb. 2 2000 to the filing. Court documents stated that the defendants in contravention of the Guam Procurement Law had proceeded with purchase of the trash trucks. The documents said the “purchase orders are for refuse collection trucks that cannot be warrantied on Guam and are not built or intended for export outside of the contiguous 48 states.” The purchase order had gone to the federal General Services Agency.
The documents also referred to the fact that under the procurement law the defendants had been required to procure the trucks from Guam-based businesses. The action claimed that through the competitive bidding process Morrico should have been awarded the bid.
Morrico is asking for a declaratory judgment awarding the company the purchase order attorney’s fees and return of public money.
Michael F. Phillips attorney at Phillips & Bordallo acting for Morrico said the procurement law had major faults and as it stood “Doesn’t provide much of a remedy.” He said despite the actions that should have halted the DPW order “My client found out that the order was processed and on its way. He was assured it would be canceled.”
Phillips said he was in negotiations with the attorney general who was acting for the department. He said the attorney general was “fairly positive in making attempts to resolve the matter.” Phillips said he was very hopeful of a resolution very soon.
Morrico is also involved in legal action concerning procurement through two bids for six ambulances and three structural pumper fire trucks.
In the case of the fire trucks in the Superior Court of Guam Morrico filed on Feb. 4 a complaint seeking a temporary restraining order and injunctive relief. Morrico named the General Services Agency the Department of Administration Claudia Acfalle chief procurement officer at the General Services Agency the government of Guam and Mid Pac Far East a division of Bisnes Mami Inc.
In the case of the six ambulances Morrico filed a motion for a preliminary injunction on Feb. 13 in the Superior Court of Guam. In that case the GSA DOA and Claudia Acfalle are named as defendants.
In November 2003 the Guam Fire Department requested quotations from four off-island fire-truck manufacturers for three fire trucks. On Dec. 12 2003 Acfalle authorized the procurement of the fire trucks under the emergency provision of the procurement law. The documents alleged that the fire department was already negotiating on the fire trucks a month before the execution of the emergency procurement. On Dec. 13 2003 Mid Pac Far East submitted a proposal for the fire trucks as distributor of E-One and on Dec. 15 2003 Michael F. Ungcangco chief of the Guam Fire Department wrote to GSA stating he chose to purchase the trucks from Mid Pac.
On Dec. 17 2003 Morrico received a faxed request from GSA requesting prices on three fire trucks with a handwritten response date.
The deadline was Dec. 19 2003. Morrison said the fax was not accompanied by specifications. Documents state Morrison contacted Capt. Reuben Olivas of the fire department who told the company that they should not have received the request because the trucks had already been purchased from Mid Pac. Morrico protested and requested extra time on Dec. 20 2003. “We said we can’t quote unless we get the specifications. We got them three days later — the first three pages were missing. They were already specified and purchased from who they wanted.” GSA granted an extension to Morrico but only to Dec. 26 2003. Morrico staff worked on the bid up to and including Christmas Day and submitted it .
On Jan. 8 through a Sunshine Act request it was revealed that GSA had issued purchase orders to Mid Pac for the fire trucks.
On Jan 14 2004 Morrico protested the issuance of the purchase orders and then filed in court represented by Kevin J. Fowler attorney at Dooley Roberts & Fowler LLP.
Judge Michael Bordallo ruled on March 11 the fire department did not comply with the procurement law nor did the determination of emergency and granted a preliminary injunction.
On Dec. 19 2003 two days after it received a fax requesting a price on the fire trucks Morrico received a second price request for the ambulances with a deadline of Dec. 26.
Morrison said “On Dec. 19 we received another hand-written fax. That one was a one-liner.”
Morrison said that action was “well timed ” as all manufacturers Morrico might have contacted in connection with the bid were closed for the Christmas vacation. A request for an extension was granted until Dec. 30 2003.
Morrison accepts the fact that GSA requests would be of one-line on occasion and handwritten. “Fair enough ” he said. “That’s GSA’s way of asking.” Morrison said he has met with Acfalle to go through his concerns.
On Jan. 4 2003 Morrico contacted GSA to find out who had won the bid. Morrison said “They said ‘We’re not allowed to tell you. You have to send us a Sunshine Act request.’”
Following that request Morrico received advice on Jan. 8 2004 that purchase orders were issued to federal GSA Kansas Region 6. Morrison said “It took a second request to find out why.” He said “There were only two bidders. The bid analysis was done incorrectly and did not include freight cost. It was an adding error and they should have looked at it again.”
Morrison said he began discussing the situation with members of the legislature. “They said ‘Protest ’ so we did but there was no response and meanwhile the purchase order was proceeding with GSA.”
Morrico filed a complaint in the Superior Court on Jan. 22 seeking a temporary restraining order and injunctive relief. On Feb. 16 the request for a temporary injunction was granted.
He said “We believe the order for the ambulances is on hold. If they haven’t stopped the purchase order they are breaking the law or in contempt of court whatever you care to call it.”
Morrison said “As a heavy equipment dealer the government of Guam is our biggest customer but they don’t spend money here but in the USA. They have to ask Guam vendors what they can supply at what price and with what delivery time. Guam vendors must have the opportunity to quote.”
Morrison said fire department staff do frequent the Morrico property when equipment is brought to Morrico for service under the warranty. “They have been saying that Morrico is jeopardizing public safety. They come in because we maintain ambulances under a five-year contract for maintenance.”
Maintenance of the ambulances has also not been without problems. Morrico maintains four Freightliner ambulances for warranty and preventive maintenance service as of May 2001. Additional repair bills came to over $21 000 between May and November 2003 for which Morrico invoiced the fire department. Morrison said “They said ‘We have no money ’ and I should write to the governor.”
Morrison did so on Nov. 18 2003 asking for payment by the Department of Administration of $21 049.34. He pointed out that “Morrico is not in a position to complete additional repair items … simply because we cannot afford it.”
The letter gave a report on the condition of the ambulances: “GFD are unable to complete a daily engine fluid check on one of their ambulances because they cannot lift the hood after Typhoon Pongsona damage. If the engine seizes through lack of oil then it will not be covered by Freightliner engine warranty.” The letter went on “GFD are driving the GFD Tamuning station ambulance with a water-logged and blown engine. Morrico have this engine in the shop ready for installation … the Barrigada ambulance has an intermittent siren problem and the Yigo ambulance has an automatic throttle problem … Morrico have all parts on Guam to complete an air-conditioning upgrade on all four GFD ambulances. How is Morrico expected to complete this work without the ability to pay their technicians since May 2003?”
Morrison said “All of a sudden — we got paid.”
Morrison says if procurement processes were accurately administered from beginning to end litigation would not be necessary.
He said “These bids wouldn’t be in court if these people followed the law. I have been asking for the assistance of senators and government agencies. We are policing government — and activities which are not following the law.”
Morrison said he contacted Sen. John “J.Q.” Quinata chairman of the Committee on Public Safety and Tourism of the 27th Guam Legislature and Lt. Gov. Kaleo S. Moylan — “all before we went to court.” He had also met with Sen. Antoinette D. Sanford in the absence of Sen. Frank B. Aguon Jr. vice speaker of the 27th Guam Legislature.
Morrison said “I don’t like going to court. You don’t get your costs back it costs time and delays the procurement process.”
He said at present a company has no choice but to resort to litigation if it wished to secure redress. “After a protest to the relevant agency if you get a letter back that the protest has been denied then you have a $20 000 decision to make.”
Morrison said despite the legitimate reasons for the stand his company had taken “We are perceived as hindering an important process of acquiring emergency vehicles for the people of Guam.”
He said there had been news reports concerning the fact that the Guam Fire Department was short of emergency equipment. “That came out after we took them to court. That’s why I’m here. I want to make sure people understand the situation.”
Ungangco said “My response to Mr. Morrison’s accusations is that they are baseless and unfounded. We have worked through the specifications of the fire trucks and done so legally. We did not choose Mr. Morrison’s company because he failed to meet certain specifications.
“Because of certain technicalities the judge ruled in his favor. There is a conflict between the law and the rules and regulations and the judge ruled that the law supersedes the rules and regulations.”
Ungangco said he has his own complaints. “We have had poor service from his company. If a vehicle is defective that is a warranty issue. That is part of the bidding process. He doesn’t have to fix it if it’s not a warranty issue.” Concerning ambulances that had been the subject of debate as to whether work came under warranty or not Ungangco said “We put an ambulance in and he didn’t want to repair it. We lost the warranty on that vehicle because I am not going to wait on Mr. Morrison to decide whether it’s a warranty issue or not when the safety of the people of Guam is at stake.”
Ungangco said the fire department had a heavy responsibility. “Whatever we so decide in the fire Department we are doing it in the interest of the public — and ensuring that we follow the procurement process.”
He said media stories had not come from the department. “We have not gone out and pointed fingers at Morrico Corp. at all.”
Lawrence J. Brazil general manager of Mid Pac Far East declined to comment on specifics of any procurement process or legal action. He did say that in the time he has been manager of Mid Pac [about one year] Mid Pac had not lodged a protest under the procurement law.
He also told the Journal “The procurement process — if followed correctly by a company and the company is selling at the best value to the government — there should be no question about it. We don’t win every bid and we don’t lose every one. It’s set up that way for a reason.”
Brazil said of Morrison “He’s our competitor and a formidable competitor as far as I’m concerned. Competition is good for the community and good for everybody. We do have very good relations with the majority of our competitors. There’s no way you can support the community of Guam after a natural disaster as a single business.”
Morrison said there should there be chances to the procurement law which he said “drastically needs updating.” In addition he said vacancies on the procurement board should be filled. “There is no political initiative to put that board in place
The Procurement Appeals Board is a seven-member board — appointed by the governor and approved by the Guam legislature — whose members serve for a six-year term. The board must contain a certified public accountant a member of the Guam Bar Association and four members with procurement experience. The three appointees are Richie K. Lim chairman of the advisory board of Mabuhay News chairman; David J. Highsmith attorney who takes the CPA seat; and Carmen D’Oro supervisory security assistant for the U.S. Fleet and Industrial Supply Center for Naval Forces Marianas. Two appointees are pending. They are June S. Mair managing partner of Mair Mair Spade and Thompson and Anthony Camacho staff attorney at the Guam Power Authority. Two vacancies are pending. Shawn Gumataotao director of communications in the office of the governor said the two pending appointees were gathering documents and he expected the appointment process to move forward in the near future. Gumataotao said “We are asking the legislature to act very quickly on our appointments.” MBJ