Bahamas<\/p>\n
The winning bidder\u00a0to develop Ragged Island\u2019s $2m solar microgrid, on the\u00a0same day\u00a0it signed the deal with BPL,\u00a0assigned all project rights to\u00a0an entity that failed to make\u00a0the final tender\u00a0round.<\/p>\n
Consultants hired by the Prime Minister\u2019s Office described this as \u201cconcerning\u201d in a report that detailed numerous flaws in the tendering process for a renewable energy solution designed to\u00a0aid the Hurricane Irma-stricken island\u2019s revival.<\/p>\n
FTI Consulting, in a document seen by Tribune Business, also said there was no evidence to show\u00a0the winning bidder, Canadian-based Tugliq Energy Company, had obtained the $400,000 performance bond to guarantee its performance within the stipulated ten-day timeframe\u00a0following the contract\u2019s signing.<\/p>\n
The same applied to Salt Energy, the company to which Tugliq assigned 100 percent of the project rights. And the report also criticised the composition of the committee formed to evaluate the bids, arguing that it was \u201cinconsistent with best practice\u201d and may have breached Bahamas Power & Light\u2019s (BPL) own policies and procedural requirements.<\/p>\n
\u201cThe contract for the Ragged Island solar microgrid project was awarded to Tugliq Energy Company, which had during the RFP (request\u00a0for proposal) phase but not the RFQ (request for qualification) phase, disclosed its intention to sub-contract some portion of the contract to Salt Energy,\u201d the FTI Consulting report said.<\/p>\n
\u201cSalt had submitted qualifications during the RFQ phase, but was not invited to participate in the next phase. Nonetheless, BPL awarded the tender to Tugliq knowing that Salt would play a role in the project.<\/p>\n
\u201cMore concerning was the fact that on July 19, 2019, the same day Tugliq signed its contract with BPL, Tugliq assigned the entirety of the contract to Salt in a separate agreement,\u201d the report added. \u201cThus, Salt assumed the entire Ragged Island solar microgrid project despite the fact that BPL did not invite it to participate in the second phase of the tender.<\/p>\n
\u201cThis raises concerns that Tugliq and Salt may have co-ordinated their tender participation in a manner not fully disclosed to BPL.\u201d Besides concerns over bid manipulation, the FTI Consulting report also detailed contrasting explanations from BPL chairman, Dr Donovan Moxey, and chief executive, Whitney Heastie, over the utility\u2019s decision to consent to Salt taking over the project.<\/p>\n
The assignment had already been agreed between Charles Meier, Salt\u2019s president, and Nicolas Seguin, one of Tugliq\u2019s three shareholders, when Mr Heastie signed the deal on BPL\u2019s behalf as a sole signatory on July 23, 2019, some four days later.<\/p>\n
\u201cWhen asked about the assignment letter during the course of an interview, Heastie said that he was not in the approval chain but was aware of the assignment and recalled that it was presented to the Board, which approved it,\u201d FTI Consulting\u2019s report said.<\/p>\n
\u201cHowever, FTI found no references to the assignment in the Board meeting minutes. In addition, Moxey said he was not familiar with the contract assignment or the circumstances surrounding it.\u201d<\/p>\n
FTI Consulting added that the Tugliq\/Salt contract was discussed at BPL\u2019s July 26, 2019, Board meeting. Burlington Strachan, BPL\u2019s head of grid solutions and a 40-year veteran with the utility, informed the Board that the contract had been awarded to Tugliq on an \u201cengineering, procurement and construction (EPC)\u201d basis despite Salt taking over all rights to the project one week before.<\/p>\n
\u201cStrachan also informed the Board that BPL had received $2.5m in government funding for the Ragged Island solar microgrid project,\u201d the report added. With Bahamians facing a double exposure as BPL customers and taxpayers, FTI Consulting sought an explanation from Mr Strachan as to \u201cthe rationale for the assignment\u201d to Salt.<\/p>\n
\u201cStrachan believed that Tugliq was primarily interested in the independent power producer (IPP) option, and did not have much interest in the EPC option,\u201d the report detailed. \u201cHe described Tugliq as more of an IPP-focused company, with Salt being more of an EPC-focused company.<\/p>\n
\u201cTherefore, when Tugliq was selected as the winner of the EPC contract, it decided to forego the entirety of the contract in favour of Salt. It remains unclear why Tugliq would have submitted an EPC proposal in the first place if this option was not of interest to it.\u201d<\/p>\n
Bidders were allowed to submit different types of solutions for Ragged Island\u2019s energy needs. The initial RFQ phase, designed to separate serious, qualified bids from the also-rans, saw Tugliq fare poorly on both the EOC and BOOTT (build, own, operate, transfer and train) submissions, finishing second-last in both categories.<\/p>\n
\u201cTugliq Energy Company later won the RFP bid, despite not scoring well in the RFQ phase,\u201d FTI Consulting noted. \u201cIt received 32 points for its BOOTT qualifications and 30.5 points for its EPC qualifications, just above the minimum qualifying score.\u201d<\/p>\n
Salt did not even make it to the RFP phase, with Tugliq\u2019s partner in the the prior round identified as fellow Canadian renewable energy distributor, Rematek Energie. The latter, of course, would eventually be ditched.<\/p>\n
Four final bids were eventually received in the RFP round. Tugliq submitted both EPC and IPP solutions, while ABB offered an EPC proposal and NantEnergy an IPP structure. However, FTI Consulting identified \u201cdiscrepancies\u201d between the criteria used to evaluate EPC and IPP bids, with the former requiring \u201cfewer items\u201d and less details.<\/p>\n
Tugliq\u2019s EPC proposal scored highest due to the experience of its then-proposed sub-contractors, SMA Sunbelt, Salt and Grand Bahama-based Waugh Construction.\u00a0Both Salt and SMA Sunbelt had initially been standalone participants in the process, but ultimately threw in their lot with Tugliq.<\/p>\n
\u201cIn further reviewing Tugliq\u2019s bid documents, FTI observed that its technical proposal was prepared by SMA Sunbelt and provided to Tugliq on June 6, 2019, one day before the RFP deadline,\u201d the report said. \u201cAn attached cover letter from SMA Sunbelt indicated that it was drafted in response to a request from Tugliq.\u201d<\/p>\n
FTI Consulting said there were also discrepancies between Tugliq\u2019s offer and the bid requirements. Whereas the battery system was supposed to be located 1.6 miles from BPL\u2019s existing Ragged Island site, the Tugliq proposal called for it to be placed at the latter location.<\/p>\n
And, instead of a minimum energy storage capacity of 1,260 kilowatt hours (kWh), and minimum AC output of 300 kW (kilowatts), the Tugliq offer proposed a capacity of 1,200 kWh and output of 216 kW. Still, the final contract with BPL stipulated a $2.9326m \u201cbase price\u201d with Tugliq to receive $1.609m, or 55 percent, of this sum as a mobilisation payment upon signing.<\/p>\n
The bids were evaluated by Mr Strachan and three persons from the Rocky Mountain Institute, a non-profit that specialises in renewable energy. The FTI Consulting report said this may have violated BPL policies by not being sufficiently diverse and failing to include persons from \u201cdisinterested\u201d departments, such as procurement or finance.<\/p>\n
\u201cA theme that emerged during the course of FTI\u2019s review was a general failure by BPL to abide by policies and procedures,\u201d the consultants concluded.<\/p>\n