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OPA orders CUC to allow firms to revise audit proposals or cancel RFP

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THE Office of Public Auditor last week granted the appeal of Burger & Comer, and directed the Commonwealth Utilities Corp. to either to allow all proposers to review their proposals or cancel the request for proposals or RFP for financial and compliance audit.

Burger & Comer is among the three companies that submitted timely proposals when CUC issued an RFP late last year for financial and compliance audit services, to cover fiscal years, ending Sept. 30, 2019, 2020 and 2021.

The two other companies that submitted proposals were Ernst & Young (CNMI) Inc., and Deloitte & Touche (CNMI) Inc.

Receiving 342.5 points, Burger & Comer was eliminated from the process by the selection committee.

Ernst & Young and Deloitte & Touche received 372 points.

OPA records show that the selection committee contacted Ernst & Young and Deloitte & Touche regarding their proposals for clarifications and to determine their ability to meet an extended schedule for the FY 2019 audit.

The committee did not contact Burger & Comer regarding its ability to meet an amended due date for the FY 2019 audit work.

On Jan. 15, CUC asked  OPA to approve the ranking of the proposals but OPA declined citing its role in the procurement process and the need to preserve its independence.

On Feb. 6, the selection committee recommended that the contract be awarded to Ernst & Young, and notified the other two firms they were not ranked as top qualified firm for an award of the contract.

Burger & Comer filed a protest questioning “how any other firm could be more qualified or complete the audit work for a lower price.” The firm also asserted that its proposal was improperly evaluated and received an unduly low score on project timeliness.

Burger & Comer stated that it was the most qualified because it has completed similar audit work for CUC for the previous five years, “whereas neither of the competing bidders have completed audit work for a utility in Saipan in the past five years.”

CUC Executive Director Gary Camacho denied Burger & Comer’s protest on April 21, and affirmed the award in favor of Ernst & Young

He said  Burger and Comer’s proposal did not sufficiently explain the time table of its work and suffered in the rating by the source selection committee.

Burger & Comer appealed the executive director’s decision to OPA.

Public Auditor Mike Pai recused himself from the appeal due to his position as former partner in Ernst & Young and his personal friendship with David Burger of Burger & Comer.

OPA attorney, Ashley Cost, was named designee of the public auditor for the appeal.

According to OPA, Burger & Comer’s appeal “suggests they are clearly the most qualified firm and deserving of an award of the audit services contract. The firm contends that their low ranking in the ‘project timeliness’ portion of the evaluation was based on a misunderstanding by the selection committee and their subsequent exclusion from further discussion concerning a modified deadline for FY 2019 audit was unfair business practice.”

OPA said while the Burger & Comer appeal urges OPA “to conclude that they are clearly the most qualified firm, that question is not properly before OPA. Rather, it is the first duty of OPA to review the record and determine whether the evaluation made by the source selection committee was reasonable and consistent with the terms of the solicitation.”

OPA stated that the determinations made by evaluation committee will not be reviewed absent bad faith, fraud, or lack of reasonable basis for determination.

This view is consistent with the review of agency evaluations conducted under federal procurement rules, OPA stated.

Accordingly, “it is OPA’s job not to re-evaluate the proposals, but instead to determine whether the evaluation conducted by CUC was reasonable under the circumstance.”

OPA said the “focus of substantive argument in the appeal goes to the ‘project timeliness’ component of the evaluation. While the appeal relies heavily on the experience of Burger & Comer in performing audit services for CUC for the previous five years to suggest they are the most qualified firm, the core of the Burger & Comer challenge to the selection process in the appeal is that several evaluators misunderstood the timeline included in the Burger & Comer proposal, resulting in an incorrect ranking.”

OPA said  reviewing the proposals at face value, the ranking by the selection committee of the Burger & Comer proposal in the project timeliness category appears entirely reasonable.

OPA said it “will not supplant its own opinion for that of the contracting agency when the agency evaluation is reasonable and consistent with the terms of the solicitation.”

Accordingly, OPA “finds the ratings conducted by the selection committee to be reasonable under the circumstances.”

Following the ranking and recommendations by the  selection committee, CUC contacted the competing firms for “clarification” of their ability to meet an extended time line for the FY 2019 audit.

The Burger & Comer appeal suggests these exclusive discussions between CUC and the competing firms constitute an unfair business practice.

OPA noted that the extension of the due date for the FY 2019 audit constitutes an amendment to the scope of work. CUC changed that due date for the FY2019 audit from Feb. 28, 2020 to March 1, 2020 after the selection committee ranking of the proposals.

While this change did not alter technical requirements of the audit engagement or the total amount of work to be done, OPA said it drastically changed the urgency of the project and no doubt affected the ranking conducted by the selection committee.

The key factor resulting in the low ranking  of the Burger & Comer proposal was concern surrounding their ability to meet the tight timelines in the RFP, OPA added.

“Given the delay in award of the contract due to the protest and appeal process, further exacerbated by government disruptions resulting from Covid-19, OPA recommends revising the current solicitation and allow all proposers to revise their submissions,” OPA stated.

It added that this would avoid the need to advertise and begin the process anew.

 

 

   

 

 

 

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