Friday, September 21, 2012

Federal Government Ignored Stimulus Rules, Purchased Chinese Solar Panels

The federal government violated stimulus fund purchasing regulations when it agreed to purchase solar panels for a "green energy" upgrade of the Sen. Paul Simon Federal Building in Carbondale, Illinois, which houses Assistant Senate Majority Leader Dick Durbin (D-IL) and Illinois 12th District Representative Jerry Costello (D-IL), in addition to other federal agencies and offices; according to a four page advisory memo sent by the inspector general to the General Services Administration in the summer of 2011. The Obama administration has blamed unfair competition from China for the bankruptcy of solar panel manufacturer Solyndra, which has cost U.S. taxpayers in excess of $500 million dollars.
Worker points to Chinese solar panels during
installation at Paul Simon Federal Building;
Carbondale, IL

On Thursday, the U.S. House approved the "No More Solyndras Act" by a vote of 245-161, designed to tighten oversight of a loan guarantee program, operated by the U.S. Department of Energy, made the loan guarantee to Solyndra. The bill introduced by Energy and Commerce Committee Chairman Fred Upton (R-MI), would reorganize the program to restrict eligibility for future guarantees to projects that submitted applications before Dec. 31, 2011. It would require the Treasury secretary to review those guarantees and oblige Energy to consult with the Treasury Department on any changes in the terms and conditions of a loan guarantee. The bill also would impose administrative sanctions and civil penalties of $10,000 to $50,000 on federal officials who violate the requirements of the program.

Friday, House Oversight and Government Reform Committee Chairman Darrell Issa, (R-CA), said the program was “rife with mismanagement” and that people involved violated law. “Department officials illegally altered the terms of Solyndra’s loan agreement to advantage individuals who were invested in the company and political supporters of the president,” he said. “Passing the 'No More Solyndras Act' holds the administration and DOE officials accountable and provides greater transparency to prevent future failures like Solyndra.”

Even the contractor questioned whether Chinese made panels could be used under the American Recovery and Reinvestment Act. A key component of the Obama administration's program to stimulate the U.S. economy, the stimulus bill required the purchasing of U.S. made products and components. His query in early 2010 was dismissed and the General Services Administration moved forward with using the Chinese panels on the federal building in Carbondale.

Questions about the panels, which were assembled overseas, were raised in a four-page advisory memo sent by the inspector general to the GSA in the summer of 2011, but the findings take on added significance as government officials increasingly place blame on Chinese subsidies for troubles in the U.S. solar market. "We did what we were told to do by the federal government," Jim Conkey, the company’s president, said Monday.

According to the inspector general’s memo, Conkey officials asked the GSA contracting official "whether non-ARRA compliant solar panels could be used" on Feb. 16, 2010, before the installation of the panels. "The contracting officer directed Conkey to proceed with the panels specified in the schedule contract since they have already been determined as satisfying all applicable contract clauses including the ARRA 'Buy American' Act requirement," the memo stated.

The inspector general’s memo said the overall roof work was performed under a $1.8 million task order awarded to J.R. Conkey & Associates, though Mr. Conkey said a portion of the project involving stimulus funding for the panels at issue involved about $200,000. Dan Cruz, a GSA spokesman, said an agency review revealed no other evidence of GSA projects using solar panels made outside of the U.S. The federal government placed import duties on Chinese solar panels this summer in an effort to fight dumping of the panels in the U.S. market. China has responded by opening anti-dumping and anti-subsidy probes against the U.S.

According to the report, the contractor, J.R. Conkey and Associates, Inc., had asked the GSA’s contracting officer whether buying the Chinese panels were ok under the stimulus bill rules. They were told that it was and to proceed. This was incorrect, the IG noted, and it urged the GSA to take "necessary corrective measures."


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