The Office of Public Accountability has barred a local vendor from GovGuam contracts because of an issue involving the Hakubotan building in Tamuning.
Local vendor SH Enterprises Inc. is now prohibited from entering into any GovGuam contracts for a year.
That’s because the OPA found it in violation of procurement laws when it allowed GovGuam to use the Hakubotan building to open the War Claims Office in January of last year.
SH Enterprises owns the Hakubotan building and allowed GovGuam to use it free of charge.
The problem is that SH Enterprises allowed use of the building for free during the performance of a $3.7 million dollar contract with the Department of Public Health and Social Services.
Three weeks afterward, it was awarded a $5.9 million contract with the Department of Corrections.
“When vendors apply under an IFB, they have to file with their bid documents wherein they sign an affidavit that says that they’ve not gifted anything to any government official in the past and that they are not going to do it during their contract, and they’re not going to do it in the future,” Cruz said.
SH Enterprises countered with a number of arguments.
Among them, SH Enterprises argued that the procurement law doesn’t apply when the value of the lease is less than $10,000 or the lease is for a term of less than five years.
GovGuam used the building for about three weeks.
Also, it’s been argued that the governor is allowed to receive gifts.
Cruz said that the deciding factor in the OPA’s decision is the fact that SH Enterprises is a vendor that was in the process of executing a contract and had bid for another contract at the time the Hakubotan building was used.
“SH knew that they should not be giving these gifts to the government, the government insisted that the governor had the authority to accept gifts. And I don’t doubt that the governor can receive gifts but the law is very clear that no gifts are supposed to be coming from a vendor. If you wanted to give…and you’re not a vendor..you can give a million dollars if you wanted. But if you’re a vendor..you can’t give one cent,” Cruz said.
Cruz added that he can’t tell if there was intent to break the law but SH Enterprises should’ve been aware of the pertinent laws, rules, and regulations when it applied for government contracts.
“I don’t know if it was a mistake. But it shouldn’t have been a mistake, because some time in September or October, when SH was filling out their RFP, they consciously sign, separate from the bid, a document that says ‘I am not going to be giving a gift.’ And in the contract itself, when they won the contract in November, it’s very clear within the contract that they are not to be giving gifts to the government during the period of the contract, and all the way to the warranty period,” Cruz said.
Cruz said that SH Enterprises has 14 days to appeal the decision.