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PUC approves $42,968 increase for GWA river‑intake work amid dispute over contingency limits
Summary
The Guam PUC unanimously approved GWA’s requested $42,968 increase for change order No. 6 on the Hugen surface water treatment plant rehabilitation project, while commissioners debated whether previously authorized contingency language limited subsequent change orders to 10% or allowed GWA to apply a 20% protocol.
The Guam Public Utilities Commission unanimously approved a $42,968 funding increase to GWA’s change order No. 6 for river‑intake and dredging work at the Hugen surface water treatment plant.
In presenting the docket, the administrative law judge, Anthony, summarized the project’s procurement history: a $9.1 million award in 2023 with an explicitly stated 10% contingency ($918,877), followed by a sequence of change orders that have raised the contract toward about $12.1 million. "I found change order number six reasonable," Anthony said, adding that prior change orders "were all reasonable, approved, and necessary" to address demolition, infrastructure replacement and regulatory corrective work.
GWA’s representative told the commission the utility filed an objection to a paragraph in the ALJ report that characterized some change orders as exceeding the approved contingency. The GWA representative said the utility acted in good faith and that, under GWA’s contract‑review protocol, the utility has applied a 20% contingency in past practice. "We had every good‑faith belief that we were in compliance with the protocol," the representative said, arguing the 2023 order did not expressly prohibit application of a larger contingency under the protocol.
Commissioners pressed both sides on the legal interpretation and on the project’s status. The ALJ pointed out the 2023 order explicitly "includes a 10% contingency of $918,877" and noted the protocol requires PUC approval if procurement exceeds 120% of the initially approved aggregate cost. Commissioners also asked about remaining work and future change orders; staff said the project is nearly complete—"we're 99% complete," the utility representative said—and that change order No. 6 covers river‑intake maintenance and required environmental permitting.
Commissioner Pete made the motion to approve the funding increase and ratify the prior change orders cited in the docket; Commissioner Joe seconded. The motion carried unanimously.
The commission’s final order will reflect the record and the ALJ’s findings; GWA was asked to coordinate with staff on any future change orders and to provide a timeline for the remaining river work. Staff also offered a site tour for commissioners once construction is finished.
