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Feds ignore rules and use stimulus cash to buy Chinese solar panels
Question of the Day
Government officials blame unfair competition from China for the collapse of solar panel manufacturer Solyndra, but such concerns didn’t stop the federal government from breaking stimulus program rules to use Chinese solar panels atop a federal building housing the offices of a senator, congressman and several agencies.
Even the contractor questioned whether Chinese-made panels could be used under the American Recovery and Reinvestment Act, the stimulus program that mandated use of U.S.-made products. His query in early 2010 was dismissed and the General Services Administration moved forward with using the Chinese panels on the Sen. Paul Simon Federal Building in Carbondale, Ill., records show.
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.
Since last summer, Solyndra LLC and another solar company, Abound Solar, have filed for bankruptcy despite receiving generous federal loan guarantees. After both bankruptcies, government officials were quick to place blame on subsidies from China that allowed foreign solar panel manufactures to sell their products below cost, squeezing U.S. solar companies.
Meanwhile, the contractor on the Illinois building project, J.R. Conkey & Associates, initially questioned GSA officials on whether solar panels assembled in China could be used under the stimulus program, but a procurement officer told the company to proceed, according to records.
“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 [Recovery Act] 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 found no other instances of GSA projects using solar panels made outside of the U.S.
In a written response to the inspector general last year, officials also disagreed with several aspects of the review. The Federal Acquisition Service, an arm of the GSA, said the contract to J.R. Conkey was for a “complex roof mounted electrical grid system” and that the panel in question — the SP205 — was “one component of this overall system.”
“Here, the panels themselves are not a contract item” the service’s response stated. “Rather, they are an important part of a solar system, but are integrated along with an inverter, tubes and other components into a system.”
And for purchases of such systems, the Trade Agreements Act, not the Buy America Act, applies, according to Federal Acquisition Service officials, who added that only the Bureau of Customs, now a part of the Department of Homeland Security, could make a determination of [Trade Agreements Act] compliance.
Still, the inspector general’s memo stated that the panels violated the provisions of the stimulus program, according to the memo.
“The photovoltaic panels installed were assembled in and shipped from China,” the memo stated. “Under the ARRA, the Chinese panels cannot be purchased with ARRA funds.”
The three-story Simon building houses local offices of the Internal Revenue Service, the Social Security Administration, the Drug Enforcement Administration, and Rep. Jerry F. Costello and Sen. Richard J. Durbin, Illinois Democrats. It’s named after Paul Simon, the late U.S. senator from Illinois.
The building project also is profiled on the GSA’s website, though no mention is made of the origin of solar panels.
The memo highlighting the expenditures from the inspector general was sent to two GSA officials. The first was Robert Peck, the former Public Buildings Service commissioner who was one of several executives ousted earlier this year when details surfaced about the GSA’s lavish Las Vegas conference in 2010.
The second official to receive the memo, Steven J. Kempf, was named commissioner for the GSA’s federal acquisition service in 2010, but he took a two-month medical leave earlier this summer. He came under scrutiny after recent revelations about another roughly quarter-million-dollar employee awards ceremony also held in 2010.
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