Mary Torres Seeks Probe Into Guam Port’s Legal Payments

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Former GM claims legal services were procured improperly

By Mar-Vic Cagurangan

HAGÅTÑA, Guam (Marianas Variety Guam, August 2, 2013) – Mary Torres, former Port Authority of Guam (PAG) general manager, is seeking an investigation into the allegedly improper payments made to the law offices of Phillips and Bordallo based on PAG’s legal services contract, which she said was procured illegally and without proper authority.

In a letter sent on Wednesday, Torres asked Attorney General Leonardo Rapadas "to obtain judgments and hold personally responsible those individuals who disbursed government funds to Phillips and Bordallo" and to recover the excess payments made to the law office.

Torres said the professional service agreement originally approved by the Attorney General’s Office set a $499,999 ceiling on the contract, with a corresponding provision that required the Port to issue a new solicitation if the billing amount exceeded the cap.

Based on the port’s payment records, Phillips and Bordallo’s cumulative billing total has reached $698,734 for services rendered through December 2012, which was $198,733 above the contract limit.

Phillips and Bordallo, which began providing legal services to the port in May 2011, has received payments totaling $637,695 as of June 20.


Port legal counsel Mike Phillips said PAG negotiated a contract with his law firm with an initial cap of 499,000 in 2011.

"This was a one-year contract with an option for both parties to renew the contract – the renewal took place one year later in 2012," Phillips said.

He said the AGO approved the initial contract and also later approved the removal of the cap on the subsequent new contract the following year.

"The $499,000 cap Ms. Torres refers to is for each contract, not a cumulative figure for any new contracts for subsequent years we negotiate with the Port," Phillips said.

"The Port and the AGO have approved any and all contracts with our firm. We are now into our third year of providing legal services to the Port," he added.

Avoiding AGO’s oversight

Torres said PAG intentionally set the cap at $499,999 "to avoid having the attorney general act as the legal advisor during all phases of solicitation or procurement process."

Under the Guam procurement law, any government contract that costs $500,000 or more requires AGO’s involvement in the solicitation process.

"The attorney general did not have any role in this particular procurement," said Torres, who left the port in December at the height of controversy over the dismissal of six employees.

"Although the attorney general approved the agreement as to form when the contract was executed, the attorney general was not involved during all phases of procurements," she added.

Torres cited a declaration made by PAG Procurement and Supply Manager Alma Javier, who confirmed the procurement was not estimated to result in an award of $500,000 before the contract was signed.

During a board meeting on Nov. 28, 2012, Javier reminded board members about the contract ceiling, advising that "in accordance with the provisions of the contract, a new contract had to be procured before additional work was performed."

"(Javier) requested that the board authorize a solicitation package for legal services by December 2012, with evaluation and negotiations by January 2013 and final award by February 2013," Torres said.

Cap lifted

Port officials said the contract ceiling has been lifted with AGO’s approval.

In an earlier interview, PAG Board Chairman Dan Tydingco said the Port has decided to remove the cap due to an increased workload requiring legal services at the port including profile cases involving personnel matters as well as loan and contract negotiations.

The removal of the cap, based on the first amendment to the contract, went into effect on April 4.

"I have to assume that neither Phillips nor the Port provided you full and complete information surrounding the original procurement when they sought the first amendment," Torres said.

Vice Speaker Benjamin Cruz earlier questioned the PAG’s bloated legal expenses.

Port officials later confirmed PAG was still paying its previous legal counsel, Lujan Aguigui & Perez, even after Phillips & Bordallo had already been hired.

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