Employing unbid agreements, the Imperial Irrigation District could spend up to $9.1 million to have controversial consulting firm ZGlobal, Inc., fill key jobs in the district Energy Department over the next three years, documents show.
IID provided the information in response to a California Public Records Act request by the Desert Review. The Feb. 15 request sought further details concerning work ZGlobal has done for IID since 2005 and was a follow up to records requests from Jan. 13 and Jan. 21.
The IID response to the January requests revealed the district is paying ZGlobal, a large Folsom-based energy consulting firm, $2.89 million for one year’s worth of engineering and planning services for the Energy Department. It also showed IID entered into at least 19 service agreements with the firm since November 2005 with a total value of about $10.6 million.
Many of those agreements, including the most recent, were “sole source,” meaning they were awarded without being put out to bid, and forms justifying that were included in the documents provided by IID.
The ZGlobal work over the past decade involves a broad range of matters related to electric-power transmission.
While the current $2.89 million service agreement covers the period from Oct. 19, 2015 to Oct. 19 of this year, a summary of ZGlobal projects with the district state IID could pay the firm $3.03 million for such services in 2017 and $3.18 million in 2018. The amounts for 2017 and 2018 are included in the line item for a “blanket purchase order” for the 2016 agreement, records show.
The Feb. 15 records request also asked how IID would evaluate ZGlobal’s work under the service agreement.
In a cover letter accompanying the records released, district Assistant Counsel Vance M. Taylor wrote, “Regarding your inquiry about the manner in which IID will assess ZGlobal’s performance under the October 19, 2015 contract, the general manager and the energy manager will monitor deliverables via quarterly reports from ZGlobal.”
IID General Manager Kevin Kelley has frequently expressed strong confidence in ZGlobal. It was on his recommendation that the IID board approved the current service agreement in October 2015 to replace five high-level energy staffers whom Kelley placed on paid administrative leave at about the same time. The board vote on the ZGlobal contact was 4-0-1 with Director Bruce Kuhn abstaining.
Kelley has declined to release further information about the employee actions. Sources said four were given termination notices and a fifth retired. Their current status was not immediately available.
At the same time IID was inking the agreement with ZGlobal, Kelley brought in Vicken Kasarjian, a former ZGlobal consultant, to co-manage Energy with the previous manager, Carl Stills. The board unanimously approved his hiring. But by late December Kelley announced Kasarjian was sole manager of Energy and Stills re-assigned to other projects.
The moves have been the subject of fiery controversy among a few members of the community and the affected staffers and their supporters. Critics argue replacing Stills with Kasarjian and removing the staffers and replacing them with ZGlobal consultants harms the district’s ability to provide reliable and affordable electric power to its 150,000 customers. They also allege Kelley overly favors ZGlobal and that it was improper for Kelley to place Kasarjian in an oversight position of ZGlobal because Kasarjian previously consulted for the firm.
Kasarjian is working under a three-year agreement that calls for a $218,000 in salary this year and possible increases in future years. He is the energy manager who, along with Kelley, will oversee ZGlobal. While Kasarjian’s employment agreement went into effect before he became sole manager of Energy, Taylor’s cover letter states “Kasarjian’s contract was not revised” due to that change.
Under the current ZGlobal contract, the consulting firm is required to dedicate six of its employees to work exclusively with IID Energy and even have them move to Imperial County. Kelley said the ZGlobal employees were to replace the staffers he removed. Taylor’s cover letter states all six “have moved to Imperial County and assumed their duties.”
Kelley stated changes were needed in the Energy Department so the district could maintain its “independence” and because there were IID-board-approved energy projects “involving millions of dollars” … “coming back to the board to be cancelled or suspended…”
Documents provided by IID show Kasarjian favors the use of ZGlobal.
The “sole source justification memorandum” for the current agreement provided by IID is dated Dec. 23 and was submitted to an IID purchasing agent by Kasarjian.
In the part of the form that asks for the “unique experience/qualifications this Vendor possesses,” Kasarjian writes: “ZGlobal is an industry leader in engineering and energy solutions; in the past ZGlobal has provided different types of services to IID. The services…were excellent and most importantly their current relationships with local and regional entities.”
In the section that asks to “Describe the circumstances to justify a sole-source or non-competitively solicited contract,” Kasarjian adds, “ZGlobal, Inc. is uniquely qualified due to their past work with IID. Their level of expertise and their understanding of the tasks will assist IID as we move forward…”
While under the current ZGlobal contract the firm will be subject to making quarterly reports, information is not available on reviews of previous ZGlobal service agreements. In an effort to learn if there were any assessments on how effective ZGlobal had been in its 18 previous service agreements with the district since 2005, the Desert Review’s Feb. 15 records request sought any audits, reports or analyses related to that work.
Writes Taylor: “With respect to your request for any audit reports associated with ZGlobal, or any of the ZGlobal contacts, the district does not possess responsive records. Typically, the district does not prepare written audit reports of its contracts with consultants, although contract deliverables are closely monitored by management and staff.”