Ada Steps Down As Commerce Secretary and Lands Contract from Governor

October 16, 2010

Wow! Michael Ada resigned as Secretary of Commerce to "pursue doctorate studies" and within a mere three days time he has a $392,406 sole-source contract to be the state lead for the ARRA grant program.  As Secretary of Commerce, Ada served as the state lead for the program.

The Saipan Tribune reported that the 13-page, 18-month contract was awarded to Ada's business, Integrated Professional Solutions (IPS).   The article does not say how long IPS has existed or if it was created for the purpose of securing the state lead contract.

In addiiton to being the CNMI's Secretary of Commerce, Ada was (or is still) the CNMI Insurance Commissioner.

The article said that the personnel working on the ARRA grants will be absorbed by IPS.  The Department of Commerce website details the office structure of the ARRA.

The Fitial Administration said Ada was "the only one" in the CNMi who could manage the ARRA grant funds. Most government agencies make sure that several people are trained in essential functions so that no one person becomes irreplaceable.

From the Saipan Tribune:
Demapan said the governor, upon learning of Ada's intent to depart from government service, asked Ada to remain on as the CNMI state lead for ARRA programs.

“Ada was insistent that he no longer wished to be an employee of the CNMI government and that if the CNMI wished to retain his expertise they would have to do so in a professional services capacity,” the press secretary said.

...Based on the contract and the attachments, Ada's firm was to get an advance payment of $78,418 upon completion of all contract signatures.

The firm will then get paid $15,260 every month starting on Nov. 15, 2010 until April 15, 2012. Upon contract completion, the company will get $39,240.

When Ada was still in government, he was not paid separately for his duties as a Commerce secretary and as CNMI state lead for ARRA program. He was reportedly earning annually less than $50,000 in government.


Anonymous said...

Does this really surprise anyone at this point? King Fitial will do what King Fitial wants, and he will award his loyalists.

Look for more big fat greasy sole-source contracts to come.

Lynn Knight and Mike Ada are happy campers. Now all of the Fitialites are lining up expecting a big payout.

And if Joe Camacho wins in November, you can count on more sole-source dirty deals to follow.


Anonymous said...

This contract is totally absurd. Mike Ada planned this with the governor. You cannot abruptly resign and get a $392,000+ sole source contract without the knowing and blessing of the governor. This is a crime that should be investigated and litigated to the fullest extend of the law. Poor CNMI, a laughing stock.

Anonymous said...

If this is in violation of ARRA sole-source funding rules, it will be “unwound” soon enough.

Presumably, though, Mike Ada was smart enough to check on the legalities before entering into such a contract.

We don't know how much of the contract proceeds will go into his pocket and how much to equipment, operational costs, and any subcontractors or employees. But it is most likely that whatever he ultimately receives is far closer to his true worth to the Commonwealth than what he formerly received as a government employee.

[The job of Insurance Commissioner is a collateral duty of Secretary of Commerce, now performed by Mr. Sixto Igisomar in an acting capacity.]

It's not your money! said...

Taxpayer lawsuit, anyone?

Anonymous said...

At best (and I mean at best), it is a good way to get the Feds to pay for something instead of the CNMI. Let's face it, the CNMI probably comes out better on the deal, except in the slimy, sticky, quasi-ethical way this was done. Will Mike make more money? Probably. Does he deserve more money for what he does? Probably.
Will people working with Mike get more money? Definitely. I don't mind people getting ahead and I think Mike as worked hard at his (former) position, but it does not look good. In fact, it looks bad and the commenter above is probably right about it being reviewed and denied. Does this benefit the CNMI? Really, probably not. This is just less $$$ coming in and one more person that will probably leave for greener pastures. Last one out, turn out the...oh, it's CUC, don't worry about it.

Anonymous said...

It does not benefit the CNMI to grant sole-source contracts. It's a RARE situation where only one source can provide the needed services. In this case, as pointed out in comments on the Variety, the work is not particularly different than all of the other grant-work were federal laws apply.

Because there was no RFP, we cannot know whether there was someone more competent. Because there was no RFP, we cannot know whether there was someone as competent but willing to do the work for a cheap price.

Sole source contracts are a means to avoid competition, not promote it. They are tools of political payback and cost the CNMI--and in this case, the US--public money that could be used for other purposes.

Anonymous said...

But see Emmanuel T. Erediano, “Ada defends contract,” Marianas Variety, Monday, October 18, 2010, available at; contra Haidee V. Eugenio, Saipan Tribune, Oct. 18-19, 2010, (amateurish, quibbling political attacks on Ada #1 & #2).

Captain said...

This reminds me of the "sole sourced" contract, awhile ago that was done by the Gov's office in Guam something to do about the port construction and also some kind of computerized system.
It ended up the Feds refused to pay and Gov. Guam ended up "eating the costs" Last I read one person was being looked at for prosecution. Don't know what eventually happened.

The question remains though, what will happen to these "employees" when this contract is finished.
Also what happens to their "time in grade" in the retirement system. assuming that the "new company" is still going to be paying into the system.

Will the time they are working for this company be credited to "Govt Service" towards their retirement?
If all of this is happening and it is "legal"(employee wise)then this may be a way for the Govt to get rid of some of it's employee obligations and send them to the private sector while they are maintaining benefits.