The V.I. Water and Power Authority approved a nearly $9 million contract to manage the territory’s advanced metering infrastructure replacement to Witt O’Brien’s, whose bid was more than double that of the runner-up and 19% higher than the utility’s own cost estimate.
The approval came during a special meeting of WAPA’s governing board Monday, two and a half weeks after board members first heard the utility’s selection committee recommend going with Witt O’Brien’s. During that meeting, mechanical engineer Star Matthew said WAPA estimated the cost of the work at just over $7.5 million, and the selection committee considered four respondents. Witt O’Brien’s bid came in at just under $8.95 million and received an evaluation score of 450 out of 500. Rival bidder 4Liberty’s bid was less than $3.5 million and received an evaluation score of 439.
The board tabled the matter in May after member Juanita Young pressed Matthew on whether the recommended firm had any experience in AMI deployment. Matthew said Witt O’Brien’s is partnering with Z2Solutions, which has worked with advanced metering infrastructure, and that both companies have project management experience.
“My concern here is that they’ve chosen a partner that really is the one that has the skillset and has the history and has the street cred,” Young said, and that Witt O’Brien’s is “just kind of tagging along for the ride.”
At the time, WAPA Chief Executive Officer Karl Knight told board members that Witt O’Brien’s is a disaster recovery consultant with a history of partnering with subject matter experts to execute projects in the U.S. Virgin Islands. The firm was tapped by the Mapp administration in 2017 to help the territory secure federal funds in the wake of hurricanes Irma and Maria. The V.I. Public Finance Authority opted not to renew its five-year contract with Witt O’Brien’s in 2022 — several months before a former V.I. Housing Finance Authority executive candidly told a special agent from the U.S. Housing and Urban Development Department that the firm inflated invoices and was “being overpaid for its services or work that could easily be done by USVI departmental employees,” according to the special agent’s memorandum of interview.
During WAPA’s May board meeting, Knight added that a number of former WAPA employees now work for the firm’s local branch.
“So they do have a very local feel, and like I said, they understand the lay of the land,” he said. “They’ve been doing this work with us for quite some time, and I think they are — maybe as a strategic business initiative — trying to align themselves with where they think the Virgin Islands is going as far as recovery projects.”
Despite the firm’s noted locality, approximately $1.34 million of its estimate was earmarked for travel costs, according to the selection committee’s presentation.
Absent a functioning metering system, the utility has had to estimate some customers’ electric bills with uneven results. In February, WAPA moved forward with a four-year, $30 million contract with Itron to replace the failed, $13 million system Itron installed in 2014. The contract awarded Monday is to “augment our team to be able to make sure that what we have contracted with Itron — and the way it has been designed and laid out — is the way it’s installed and implemented, and that it works in the manner that we expect it to work,” Knight told board members in May.
On Monday, the board decided that the 11-point difference between Witt O’Brien’s bid and 4Liberty’s bid — a 2.2% disparity, or the difference between a low A-minus and a B-plus — was worth the $5.5 million difference in price. Ninety-eight percent of the territory’s AMI replacement is being funded by the Federal Emergency Management Agency, putting the cost of Monday’s project management contract borne by the territory at just under $179,000.
The vote came after extensive questioning from board member Maurice Muia, who noted Witt O’Brien’s involvement with the reconstruction of the Arthur A. Richards Pre-K-8 School. Change orders and inflation reportedly saw the cost of that project to increase by more than $100 million. WAPA Chief Information Officer Julius Aubain said he didn’t have any insight as to that project but noted that Itron would be the company actually performing the AMI replacement.
“So any of the change orders or anything like that would be initiated on the Itron side,” he said, not the project management side.
Muia ultimately voted against the award, which was approved 4-1. Muia later told the Source that whether a project is funded by the Virgin Islands or the federal government, the board has financial and legal obligations to make sure the money is spent well.
“Let me put it this way: I don’t want us to get into a habit of just accepting the proposals that we’re getting returned,” he said. “I want a WAPA in which we can do the majority of our work in house … that’s the kind of WAPA I would like to see us have.”
Muia acknowledged that he received prompt responses to questions the board sent to respondents but that he would have liked to have heard from Witt O’Brien’s and Z2Solutions themselves.
“But if you look at the responses, it looks like that it may have been more WAPA answering those questions versus Witt O’Brien’s,” he said, adding that he didn’t know if that was necessarily the case.
In a statement sent in response to the Source’s questions Monday evening, the utility said that while Witt O’Brien’s bid was higher, “their proposal demonstrated greater alignment with the RFP’s mandatory requirements, including completion of four AMI projects and deployment of over 250,000 meters, which 4Liberty did not meet.”
“The Evaluation Committee did take note of the comparatively low pricing in 4Liberty’s proposal, especially considering the scope and technical requirements of the project,” according to the statement. “However, it is not standard protocol, nor is it the responsibility of the Evaluation Committee, to question a vendor about their pricing decisions relative to other bidders.”
According to WAPA, proposals are evaluated “based on their alignment with the RFP requirements and the evaluation criteria.”
“The Authority fully recognizes the importance of fiscal responsibility. This procurement was conducted in strict accordance with FEMA’s procurement requirements and federal guidelines, ensuring a fair, open, and competitive process,” according to WAPA. “While the awarded contract amount was higher than our initial estimate, it accurately reflects current market rates, increased material costs, and the logistical realities of executing projects in an island environment.”
The Source was directed to ask Witt O’Brien’s or Witt O’Brien’s USVI about the number of former WAPA employees employed by those firms.
After approving the project management contract Monday, the governing board also approved an increase to its contract with consultant Ernst and Young to cover travel costs at a rate of $18,750 per month. Ernst and Young is assisting the authority’s single audit, and WAPA Chief Financial Officer Lorraine Kelly said Monday that the entire effort will be reimbursed by FEMA.
St. Croix Source
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