Knowles awards $350,000 no-bid contract to Cambridge

Posted: Thursday, February 01, 2001

JUNEAU (AP) -- A $350,000 consulting contract for Gov. Tony Knowles' office was exempted from state competitive bidding requirements based on information Knowles administration officials now admit was untrue.

The sole-source contract for expert advice on issues related to a gas pipeline was awarded Dec. 28 to Cambridge Energy Research Associates, Inc., the Alaska Budget Report reported in Wednesday's edition.

''It is not practical to award the contract by competitive sealed bidding or competitive sealed proposals due to the immediate need for the contractor to begin work no later than January 2,'' the governor's office wrote in its request Dec. 13 request for an exemption.

The request justified the exemption by casting the consulting work as essential to legislation Knowles was drafting for introduction early in the Legislature's session.

Following normal procurement procedures would require a minimum of 45 days, the request said, and would not meet the state's critical target date.

But Ed Kelly, Cambridge Energy's director of North American gas research and project director for the Alaska contract, said his firm had no role in drafting the bill Knowles introduced Jan. 8.

Revenue Commissioner Wilson Condon confirmed that the consultant had not assisted in any way with the two-page bill.

''It's a mistake, it's a wrong choice of words,'' Condon said when asked about the wording of the exemption request.

Larry Persily, Condon's deputy commissioner, said the request should probably have used the phrase ''preparing for'' instead of ''drafting.''

''Their role was to help the administration with research, market analysis, and put together the testimony that the administration would need if it testifies on the bill and on the issue, during session,'' Persily said.

The bill simply repeals a provision of a 1998 gas bill that restricts its benefits to projects for the export of liquefied natural gas, and extends by six months the deadline for applying for the special privileges the legislation provides to an approved project.

Officials in the Department of Administration's Division of General Services reviewed the Dec. 13 request and approved it Dec. 14.

Sue McGowan, a DOA contracting officer, recommended approval of the request and the choice of Cambridge Energy based on testimonial letters about the company from officials with BP Exploration (Alaska) Inc., Unocal Global Trade Corporation, and Duke Energy Corp.

The contract calls for Cambridge Energy to assist the state in preparing strategy for negotiating with some of those same companies as it pushes for development of the gas line.

Persily said the company's reputation for impartiality was an important factor in its selection.

''They're not advocates,'' Persily said.

The contract calls for the firm to assist in ''conducting a series of statewide meetings to support the state's interest for gas development.''

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