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Committee Tries to Clarify Procurement Bill Mess

Oct. 7, 2004 – Senators agreed that if an explanation offered by the solicitor general Thursday had been attached to the interim procurement reform legislation submitted and withdrawn by Gov. Charles W. Turnbull last month, the ensuing outrage would likely never have happened.
The brouhaha occurred over language in the legislation which had been changed slightly since the Department of Justice presented it to Turnbull in March. Though it was a slight change, it was sufficient to make it what former Attorney General Iver Stridiron called "grammatically incoherent." Stridiron was summarily removed from his post two days after the legislation became public.
Government Operations Committee chairman Sen. Shawn-Michael Malone called the meeting to hear from government officials about how the flawed legislation came to be.
Though he was thwarted in that regard, the meeting did reveal much about the territory's procurement procedures and problems. Testifying were acting Attorney General Alva Swan; Solicitor General Elliott McIver Davis; Property and Procurement Commissioner Marc Biggs; Inspector General Steven G. Van Beverhoudt; Eric Marcotte of Winston & Strawn, the government's Washington, D.C., legal counsel; and Elmo Adams, assistant legal counsel, Office of the Governor. Education Commissioner Noreen Michael sent a letter saying she could not appear because she is in labor negotiations.
Speaking before the Senate Government Operations Committee Thursday, Davis gave an example of an instance which would justify the legislation, in regard to a "fraudulent" contract. He said, "We think of the future – that's what attorneys do. We proposed language to handle these issues where it would be beneficial to the territory, despite being entered into in bad faith.
"For example," he said, "if a contractor was 90 percent completed with construction of a wastewater treatment plant, and it was discovered that one of his underlings had bribed someone or lied to get the performance bond, it would be up to Commissioner Biggs to force the contractor to complete the project and, after that, the government would prosecute the employee for malfeasance.
"Otherwise," Davis said, "we would have to stop the entire project and put it out to bid again. We are trying to correct something that has happened in the past, and has found its way to being paid. We have had this problem for decades."
Satisfied with Davis' statement, Swan said, "That's why he's my solicitor general." However, Sen. Lorraine Berry wasn't satisfied with the explanation. "There's no justification for this, though I'm not impugning your integrity," she said, to which Swan replied, "I'm a great believer in suing folks."
Swan said that "with the benefit of hindsight, given the media's response surrounding the interim legislation," that Stridiron's explanatory letters which accompanied the two drafts of the interim legislation, should have been forwarded to the Legislature with the legislation.
"However," Swan said, "there was no hidden agenda by the governor, attorney general or the Property and Procurement commissioner in submitting the interim legislation." He said the language in the legislation is based on the Model Procurement Code prepared by the American Bar Association. (See "Former Attorney General Clears the Air").
Backing up Davis' explanation, Swan said, "Though it wouldn't be standard practice to ratify contacts that involved fraud or bad faith, such ratification, as permitted under the interim legislation, may in some circumstances be in the best interest of the government.
Biggs devoted eight pages of a 10-page statement to defending his department, which he said comes under the gun from not only senators but from senatorial aspirants, "with no knowledge of the procurement process." He continued, "When we err, we will, and have, acknowledged the repercussions and accepted any faults associated with our process."
Biggs took exception to the whole incident surrounding the legislation, calling it "an embarrassment to this territory." In fact, he said, he had not known about its submittal.
He said he had provided input to the legislation in February. "Despite my picture appearing on the front page of a local newspaper, I was not even aware it had been sent down to this body for consideration."
Biggs explained the situation with the Anne Carlsen Center for Children, which provoked the rush to the legislation. (See "Clock Ticking on Anne Carlson Center Lawsuit"). The center is suing the government for $722,000. Biggs said the statute that governs the current procurement system mandates that we do not allow for the processing of contracts for services already rendered. "In this case," Biggs said, "no legal avenues were found, thereby necessitating the need for new legislation."
Sen. Louis Hill asked Marcotte why only 17 states have adopted the Model Procurement Code. Marcotte explained that many states have their own models.
Hill said he wanted to clear up a perception that the senators had collaborated with the administration "to do something illegal."
"So the language used in the legislation is legal," Hill said.
"The drafters of the code would be very surprised to hear the language described that way," Marcotte said.
Biggs stated the common case of an agency's entering into an agreement with a contractor and getting a good price, and, by the time the contract is drawn up, the time has expired and his department cannot pay for services already rendered. He said these are the things the legislation would avoid. In answer to questioning by Berry, Biggs said the Education, Justice, Public Works Departments and the Bureau of Internal Revenue are ones he is aware of the problem having occurred in.
Adams was late arriving at the meeting, and Hill wasted no time in trying to get to the bottom of the language that mysteriously appeared in the flawed legislation. Hill had first asked Swan about it, but Swan said he "wasn't in the loop at the time Stridiron sent the legislation to Government House. "However," Swan said, "I am a great admirer of his, and I agree with what he said."
Hill asked Adams who had drafted the legislation. Adams, his hackles visibly raised, said, "I want to make it abundantly clear that the language used was sent by the Department of Justice. I did not draft or change anything."
In a letter Stridiron sent to Malone in September, declining to appear before his committee, he said of the legislation, "The substance is there, but it was redrafted by a person or persons unknown to me before being delivered to the Legislature by Government House." Hill asked Adams if it was possible that anyone else had "redrafted" the bill.
"No, that is not possible. I was the only one there," Adams said.
On further questioning by Hill, Adams said, "I put the language into a format; I substituted the exact language submitted by the Department of Justice."
"Did you reword it?" Hill asked.
"No!" Adams said, "I didn't change any wording."
Hill said, "I don't think there's any inference that you did anything."
Adams added, "I strongly object to the inference that I changed or redrafted any legislation. The former attorney general is wrong."
Hill said, "It is interesting that three people [Biggs, Swan and Stridiron] are saying one thing, but Government House and attorney Adams are saying another."
"At some point in time," Hill said, "we have to clarify who is t
elling the truth." He asked van Beverhoudt if it would be necessary for him to investigate the matter. Van Beverhoudt, who had made it clear that he was there as an observer because he was not familiar with the issue, said, "I think they can supply you with the documents."
Adams told Malone later that he would supply the documents he had.
Sen. Usie Richards took another tack. He said he was incensed at the manner in which the legislation itself was submitted: "It's repugnant to submit to this body without even a single contract, that legislation. It spits in the face of the Legislature. How are the senators supposed to act in the absence of documentation? It's repugnant and insulting without a listing of the contracts." He asked Swan and Biggs for a list of the total contracts and the dollar amounts. "Are you suggesting that we place all our trust for you to use your judgment on who should be paid.?" he asked Biggs. Biggs and Swan said they would have to compile a list of the contracts. Biggs also said the contract has been withdrawn, and it had limits on his authority.
Swan said to his knowledge, none of the contracts the executive branch had intended to process under the interim legislation actually involved "bad faith or fraud" on the part of the contractor.
After the meeting, Hill said he thinks there is another document out there "that we haven't seen."
Committee members Sens. Berry, Douglas Canton, Hill and Malone attended the meeting. Sens. Luther Renee and Richards also attended. Sens. Carlton Dowe and Celestino A. White Sr. were absent, and Sen. Emmett Hansen II was excused.

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Oct. 7, 2004 – Senators agreed that if an explanation offered by the solicitor general Thursday had been attached to the interim procurement reform legislation submitted and withdrawn by Gov. Charles W. Turnbull last month, the ensuing outrage would likely never have happened.
The brouhaha occurred over language in the legislation which had been changed slightly since the Department of Justice presented it to Turnbull in March. Though it was a slight change, it was sufficient to make it what former Attorney General Iver Stridiron called "grammatically incoherent." Stridiron was summarily removed from his post two days after the legislation became public.
Government Operations Committee chairman Sen. Shawn-Michael Malone called the meeting to hear from government officials about how the flawed legislation came to be.
Though he was thwarted in that regard, the meeting did reveal much about the territory's procurement procedures and problems. Testifying were acting Attorney General Alva Swan; Solicitor General Elliott McIver Davis; Property and Procurement Commissioner Marc Biggs; Inspector General Steven G. Van Beverhoudt; Eric Marcotte of Winston & Strawn, the government's Washington, D.C., legal counsel; and Elmo Adams, assistant legal counsel, Office of the Governor. Education Commissioner Noreen Michael sent a letter saying she could not appear because she is in labor negotiations.
Speaking before the Senate Government Operations Committee Thursday, Davis gave an example of an instance which would justify the legislation, in regard to a "fraudulent" contract. He said, "We think of the future – that's what attorneys do. We proposed language to handle these issues where it would be beneficial to the territory, despite being entered into in bad faith.
"For example," he said, "if a contractor was 90 percent completed with construction of a wastewater treatment plant, and it was discovered that one of his underlings had bribed someone or lied to get the performance bond, it would be up to Commissioner Biggs to force the contractor to complete the project and, after that, the government would prosecute the employee for malfeasance.
"Otherwise," Davis said, "we would have to stop the entire project and put it out to bid again. We are trying to correct something that has happened in the past, and has found its way to being paid. We have had this problem for decades."
Satisfied with Davis' statement, Swan said, "That's why he's my solicitor general." However, Sen. Lorraine Berry wasn't satisfied with the explanation. "There's no justification for this, though I'm not impugning your integrity," she said, to which Swan replied, "I'm a great believer in suing folks."
Swan said that "with the benefit of hindsight, given the media's response surrounding the interim legislation," that Stridiron's explanatory letters which accompanied the two drafts of the interim legislation, should have been forwarded to the Legislature with the legislation.
"However," Swan said, "there was no hidden agenda by the governor, attorney general or the Property and Procurement commissioner in submitting the interim legislation." He said the language in the legislation is based on the Model Procurement Code prepared by the American Bar Association. (See "Former Attorney General Clears the Air").
Backing up Davis' explanation, Swan said, "Though it wouldn't be standard practice to ratify contacts that involved fraud or bad faith, such ratification, as permitted under the interim legislation, may in some circumstances be in the best interest of the government.
Biggs devoted eight pages of a 10-page statement to defending his department, which he said comes under the gun from not only senators but from senatorial aspirants, "with no knowledge of the procurement process." He continued, "When we err, we will, and have, acknowledged the repercussions and accepted any faults associated with our process."
Biggs took exception to the whole incident surrounding the legislation, calling it "an embarrassment to this territory." In fact, he said, he had not known about its submittal.
He said he had provided input to the legislation in February. "Despite my picture appearing on the front page of a local newspaper, I was not even aware it had been sent down to this body for consideration."
Biggs explained the situation with the Anne Carlsen Center for Children, which provoked the rush to the legislation. (See "Clock Ticking on Anne Carlson Center Lawsuit"). The center is suing the government for $722,000. Biggs said the statute that governs the current procurement system mandates that we do not allow for the processing of contracts for services already rendered. "In this case," Biggs said, "no legal avenues were found, thereby necessitating the need for new legislation."
Sen. Louis Hill asked Marcotte why only 17 states have adopted the Model Procurement Code. Marcotte explained that many states have their own models.
Hill said he wanted to clear up a perception that the senators had collaborated with the administration "to do something illegal."
"So the language used in the legislation is legal," Hill said.
"The drafters of the code would be very surprised to hear the language described that way," Marcotte said.
Biggs stated the common case of an agency's entering into an agreement with a contractor and getting a good price, and, by the time the contract is drawn up, the time has expired and his department cannot pay for services already rendered. He said these are the things the legislation would avoid. In answer to questioning by Berry, Biggs said the Education, Justice, Public Works Departments and the Bureau of Internal Revenue are ones he is aware of the problem having occurred in.
Adams was late arriving at the meeting, and Hill wasted no time in trying to get to the bottom of the language that mysteriously appeared in the flawed legislation. Hill had first asked Swan about it, but Swan said he "wasn't in the loop at the time Stridiron sent the legislation to Government House. "However," Swan said, "I am a great admirer of his, and I agree with what he said."
Hill asked Adams who had drafted the legislation. Adams, his hackles visibly raised, said, "I want to make it abundantly clear that the language used was sent by the Department of Justice. I did not draft or change anything."
In a letter Stridiron sent to Malone in September, declining to appear before his committee, he said of the legislation, "The substance is there, but it was redrafted by a person or persons unknown to me before being delivered to the Legislature by Government House." Hill asked Adams if it was possible that anyone else had "redrafted" the bill.
"No, that is not possible. I was the only one there," Adams said.
On further questioning by Hill, Adams said, "I put the language into a format; I substituted the exact language submitted by the Department of Justice."
"Did you reword it?" Hill asked.
"No!" Adams said, "I didn't change any wording."
Hill said, "I don't think there's any inference that you did anything."
Adams added, "I strongly object to the inference that I changed or redrafted any legislation. The former attorney general is wrong."
Hill said, "It is interesting that three people [Biggs, Swan and Stridiron] are saying one thing, but Government House and attorney Adams are saying another."
"At some point in time," Hill said, "we have to clarify who is t elling the truth." He asked van Beverhoudt if it would be necessary for him to investigate the matter. Van Beverhoudt, who had made it clear that he was there as an observer because he was not familiar with the issue, said, "I think they can supply you with the documents."
Adams told Malone later that he would supply the documents he had.
Sen. Usie Richards took another tack. He said he was incensed at the manner in which the legislation itself was submitted: "It's repugnant to submit to this body without even a single contract, that legislation. It spits in the face of the Legislature. How are the senators supposed to act in the absence of documentation? It's repugnant and insulting without a listing of the contracts." He asked Swan and Biggs for a list of the total contracts and the dollar amounts. "Are you suggesting that we place all our trust for you to use your judgment on who should be paid.?" he asked Biggs. Biggs and Swan said they would have to compile a list of the contracts. Biggs also said the contract has been withdrawn, and it had limits on his authority.
Swan said to his knowledge, none of the contracts the executive branch had intended to process under the interim legislation actually involved "bad faith or fraud" on the part of the contractor.
After the meeting, Hill said he thinks there is another document out there "that we haven't seen."
Committee members Sens. Berry, Douglas Canton, Hill and Malone attended the meeting. Sens. Luther Renee and Richards also attended. Sens. Carlton Dowe and Celestino A. White Sr. were absent, and Sen. Emmett Hansen II was excused.

Back Talk


Share your reaction to this news with other Source readers. Please include headline, your name and city and state/country or island where you reside.
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