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PUC ratifies change orders for GPA fuel tanks after ALJ finds fieldwork necessary
Summary
The commission approved change orders to repair and refurbish GPA bulk fuel storage tanks 1934/1935 including lead-based paint abatement and sludge removal; the ALJ found the work necessary but noted GPA exceeded 20% contract change thresholds without prior PUC approval.
The Guam Public Utilities Commission unanimously approved construction change orders for the refurbishment and defects correction of GPA bulk fuel storage tanks (docket 2521) after an ALJ report described the scope, cost increases and safety risks involved with sludge removal and lead abatement.
The contract was originally awarded in 2019 for approximately $8.9 million; subsequent change orders and newly identified defects on tank 1934 pushed the total expected contract cost well beyond the initial award. ALJ Camacho recommended ratifying change order number 5 (approximately $1.2 million) and approving an additional change order of roughly $4.1 million to correct interior bottom-plate and shell defects and to abate lead-based paint on the tank exterior so the tank can return to service for ultra-low sulfur diesel storage.
The ALJ said GPA failed to secure prior PUC approval for multiple earlier change orders and that the cumulative changes exceed the PUC’s 20% threshold for contract increases, but also concluded the change-order work was necessary and reasonable in scope. “I found that GPA failed to obtain the PUC’s prior approval for change order number 5,” the ALJ stated while recommending approval of the remedial work.
Commissioners asked operational questions about the handling and disposal of sludge removed from the tanks; the ALJ and GPA explained sludge removal is labor intensive and involves hazardous working conditions, and that disposal or resale of recovered material may be possible but is not guaranteed.
The commission approved the requested change orders on a voice vote. The PUC directed that the work be completed before expiration of GPA’s leasing arrangement with TriStar to avoid further extension costs, and asked for documentation verifying compliance with safety and environmental handling requirements.
Next steps: GPA and the contractor are to complete the work within the prescribed timeframe and provide required documentation to the PUC; PUC staff will monitor lease-extension exposures and confirm the change-order execution.
