Irregularities Alleged in Ou Cogeneration Bid Process / by Losing Bidder

By L. D. Barney | THE JOURNAL RECORD, November 2, 1986 | Go to article overview
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Irregularities Alleged in Ou Cogeneration Bid Process / by Losing Bidder


L. D. Barney, THE JOURNAL RECORD


Irregularities in the bidding process to develop a 100-megawatt cogeneration project for the University of Oklahoma Health Sciences Center were alleged Wednesday by a losing bidder.

James M. Samis, president of Thermonetics Inc. of Menlo Park, Calif., claimed in a meeting of the OU board of regents that his proposal for the project would mean $60 million more to the university than that by Oklahoma City-based Smith Cogeneration Inc., which was recommended Wednesday to the regents by a research committee.

The bidding impropriety charge was denied by Gary Smith, vice provost of administration and finance for the university, and head of the committee that recommended Smith's bid. Samis' projected figures, meanwhile, were called "pie in the sky" by Don Smith, president of Smith Cogeneration.

Stamis asked the regents to delay approving a developer until they can further examine the proposals.

The regents are expected to vote today on whether to name a developer for the project or delay approval as Samis requested. It would be at least two years before the plant could be completed.

The university originally intended to develop the cogeneration project, which would generate steam for heating and electricity that would be sold to Oklahoma Gas & Electric Co. under federal law.

Bids were requested from at least 30 firms, but only three valid bids were received - from Smith Cogeneration, Thermonetics and Panda Energy, said Gary Smith.

Each bid proposed a percentage of net profit to be returned to the university and a discount on steam.

Smith's provides $42.3 million in benefits to OU; Thermonetics $39 million and Panda $35 million, based on an evaluation by Stephins Inc., an investment banking firm in Little Rock, Ark., hired by the university to study the proposals.

Stamis argued the Stephens figures are very close to those provided by Smith Cogeneration. He claimed his firm would provide $119.9 million in total benefits, while Smith Cogeneration's plan would provide only $58.8 million.

He estimated Panda's proposal would have meant $93 million in total benefits.

He also charged that Smith Cogeneration did not provide financial projections in its original bid, but was allowed to add them later.

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