Previously Secret Report Describes How LP&L Was Accused of Bid Rigging

Published 03/09 2014 02:38PM

Updated 03/09 2014 10:35PM

By James Clark

LUBBOCK, TX -- The full report of a Lubbock Power & Light internal investigation – released late last week – explains how LP&L Director Gary Zheng came to be accused of bid rigging.

More than a month ago the executive summary of the report cleared Zheng.

However, the bids in question were not cleared. The LP&L board early last week threw out all bids for a major power supply project needed no later than the spring of 2019.

The executive summary of the report, completed by the Ashcroft Law Firm, said Zheng accepted information from someone associated with a potential bidder. It also said Zheng did so without knowing the person’s connection to the bidding process. The full report explains the situation more clearly.

In 2011 someone Zheng had known since 2004 was acting as a consultant and helped create bidding documents for the West Texas Municipal Power Agency. Lubbock is a member of WTMPA.

In November 2012 Zheng, the consultant and others took a trip to Jacksonville, Florida to tour a power plant. A few months later – March of 2013 – Zheng reached out to the consultant by email and asked for help to create the template for bid documents on a major power supply contract.

The bidding documents are called an RFP which is short for request for proposals.

According to the Ashcroft report, “The individual did not disclose to the LP&L Director that he was working as an independent consultant to a potential 2013 RFP bidder.”

However, the individual did tell the potential bidder that he had communicated with Zheng.

In July the consultant was present for oral presentations to LP&L by one of the bidders; Alpine Energy Group. AEG’s identity is supposed to be confidential, but it was leaked to an online publication called the Sandstorm Scholar.

The consultant told the Ashcroft Law Firm that Zheng would not have known his ties to AEG prior to July.

On October 4 Lubbock Mayor Glen Robertson met with LP&L staff and wanted to know who wrote the RFP. Zheng essentially did not answer the question, and another LP&L official claimed he wrote the RFP. Neither mentioned the consultant.

Then on October 16 Zheng was confronted behind closed doors by the Lubbock Power & Light Board. At first he denied remembering where the RFP template came from.

“When asked again, the Director told the [LP&L board] that he had indeed received the RFP template from an external source, the independent consultant,” the Ashcroft report said.

Zheng could have lost his job. The board voted twice on the issue of his employment and both times he kept his job.

The Ashcroft report is very clear that neither Zheng nor anyone else accepted any personal gain. There was no intentional effort to give one bidder an advantage over the others which would be a violation of Texas law.

However, an entire section of the report is titled “Dishonesty by LP&L Director.” The report in essence says Zheng knew the consultant’s role with AEG starting in July, but said nothing when asked about it months later.

Only when pressed on the issue did Zheng come clean as to where the RFP template came from.

The report has another criticism of Zheng, saying, “The LP&L director … knew, or should have known, that the consultant had been independently advising companies in the power field since at least 2011… ”

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