Posted on 02/04/2009 6:55:07 PM PST by bruinbirdman
Nearly seven months after taking delivery of a mobile X-ray system manufactured in the People's Republic of China, the Port of Los Angeles is on the verge of canceling the controversial contract.
The staff at the port has recommended that the Board of Harbor Commissioners find DULY Research, Inc., the California-based broker who represents the Chinese manufacturer, in default of the terms of the contract, when it next meets on Feb. 5.
"Cancellation of the purchase contract is recommended because after delivery of the mobile scanning unit to the Port of Los Angeles on July 8, 2008, field tests and other research revealed that the manufacturer and vendor failed to meet the requirements of the Purchase Contract," said a staff summary submitted to the board.
The contract created a stir in the media and on Capitol Hill because the manufacturer is Nuctech Company Limited, a Chinese company headquartered in Beijing, whose president happens to be the son of the President of the People's Republic of China.
Critics of the deal argued that procuring a Chinese-built X-ray scanning system could endanger U.S. national security, that it would outsource U.S. manufacturing jobs, and that it was possible that Nuctech had "reverse engineered" patented U.S. and European X-ray technologies. The fact that a large portion of the purchase price would be reimbursed with a port security grant from the U.S. Department of Homeland Security drew additional criticism.
The contract was originally signed between the Port of Los Angeles and DULY Research, of Rancho Palos Verdes, CA, on October 24, 2007, for a total price of $1,880,000, said the memo prepared by the port's homeland security division. Since that time, the Board agreed to certain "add-on" options – that were not described in the staff memo -- that raised the total cost of the deal to more than $2.4 million.
In recommending that the board declare DULY Research in default and cancel the entire contract, the homeland security division made no mention of any of the political controversy that swirled around the original contract.
The fact that the port had signed such a contract to purchase a Chinese-built X-ray system was first disclosed in a front-page article published in the October 2008 edition of GSN: Government Security News. Shortly thereafter, Lou Dobbs, a TV newsman on the CNN; Michael Savage, a conservative radio talk show host; and Rep. Dana Rohrabacher (R-CA), whose congressional district includes the Port of Los Angeles, all blasted the port's X-ray contract.
On Jan. 23, perhaps jumping the gun, Lou Dobbs reported that "the port of Los Angeles has apparently come to its senses on a very important issue."
The next day, in anticipation of the board's vote, Rep. Rohrabacher welcomed the Harbor Commissioners' upcoming move. "The decision to cancel this contract was the right decision and I would hope moving forward, the Ports are given direction by the federal government not to just accept the lowest bidder," said the congressman.
In fact, the board has not yet taken any official action to cancel the Chinese X-ray contract.
According to the staff memo, DULY Research and Nuctech have fallen short of the terms of their contract in several ways:
• The mobile scanning vehicle cannot be lawfully imported into the U.S. as a "conforming motor vehicle" and is not capable of being driven legally in California;
• The unit does not meet European Union standards regarding the control of fluorinated greenhouse gasses;
• DULY Research has not provided evidence of compliance with ISO 9001 quality standards;
• DULY Research has not provided system documentation or operational checklists in the English language;
• The generator for the X-ray unit failed during training due to a faulty solenoid;
• Two different perimeter monitoring radiation dosimeters failed;
• DULY Research has not provided documentation certifying the calibration of the radiation detectors, and;
• "During testing, the Mobile Scanning Unit consistently failed to operate as specified without the intervention and assistance of a DULY Research/Nuctech technician."
It sort of makes one wonder what politician or politician’s family member might have been involved in the getting this thing to the port to start with.
Feinstein?
Are you saying that the Nutech x-ray scanner might not detect the giant sphere of plutonium packed amidst the 32-inch LCD high-definition TVs?
This company is owned by the Chinese government and run by Hu Jintao’s son. Anyone who thinks the US is more corrupt about China doesn’t know the first thing about China. Here’s an article on a questionable Hu family deal:
(Quote)
Over the weekend, one of the country’s leading dailies carried a story that added an interesting angle to that $465.5 million cyber education project (CEP) that Gloria Arroyo suddenly found to be a very attractive substitute for the aborted $330 million ZTE broadband network deal.
A memorandum of agreement for the CEP signed by trade secretary Peter Favila and Dr. Kang Ke Jung, a representative of a Chinese company called Tsinghua Tongfang Nuctech Company (Nuctech), in Boao, China last April, caught the attention of ACT (Alliance of Concerned Teachers), a teachers’ organization opposed to Mrs. Arroyo’s new pet project.
The teachers could not understand why Mrs. Arroyo readily accepted China’s designation of a company that was not known for education or the use of satellites for delivering classroom lectures through television.
Nuctech specializes in manufacturing x-ray equipment for container vans, a technology more useful for customs inspections than long distance classroom education.
Jesli Lapus, the education secretary, said there was nothing anomalous about the agreement or the choice of Nuctech.
“Tsinghua Holdings of Tsinghua University owns at least 100 subsidiary companies involved in technology, including Tsinghua Tongfang Nuctech. The bottom line is Tsinghua University, the undisputed leader in open and distance learning, is the Chinese-government designated contractor for the project, subject, of course, to pertinent Philippine laws,” he insisted.
But there’s a wrinkle in Lapus’ explanation.
The president of Nuctech is Hu Haifeng, the son of President Hu Jintao of China.
A closer look at the cancelled ZTE deal will show why Gloria Arroyo prefers tied-loans with China to similar arrangements with the US or with private corporations that offer to build, operate, and transfer (BOT) at no cost and no financial risk to the government.
US companies like Arescom submit above- the-table bids because the US has tough laws on American companies that engage in bribery and kickbacks to foreign governments. That makes American proposals very unattractive to Mrs. Arroyo’s administration.
BOT bidders like Amsterdam Holdings cannot dole out unlimited bribes and kickbacks because they have a profit margin to worry about. Amsterdam Holdings backed out of a partnership with Abalos because the company could not afford to carry the $1oo million plus overprice that Abalos and his principals wanted included in their BOT bid.
So that leaves China, a one-party State where the government holds a majority stake in big companies like ZTE and Nuctech and where the only ones who can ask questions are the people who should be asked questions.
Government-owned companies in China are like our government-owned corporations - party faithful and retired cops and soldiers run them. Consequently, tied-loans guaranteed by foreign governments are good for the communist party bigwigs.
That’s why Hu Jintao offered billions of dollars to Gloria Arroyo on condition that she reverse her policy to develop the country’s infrastructure through BOT projects and sign no-bid contracts with companies he picked. Simply put, Hu names the company and Gloria names her price.
It’s clear why ZTE got the deal and why the original contract price of around $160 million ballooned to $330 million. It’s just as obvious why Gloria Arroyo and Hu Jintao are so excited about the cyber education deal: “Everybody make more money, everybody more happy.”
Except the Filipino people who will pay out the billions that will put a smile on the face of Gloria Arroyo and her newfound Chinese cohort.
(Unquote)
Bottom line is this - contrary to what some Americans think, the Chinese don’t shoot their crooks - they appoint them to their highest offices. The people who get shot are the losers in factional disputes.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.