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DEPARTMENT OF PROPERTY AND PROCUREMENT TESTIMONY OF LISA MARIA ALEJANDRO, COMMISSIONER BEFORE THE 36TH LEGISLATURE OF THE VIRGIN ISLANDS OF THE UNITED STATES COMMITTEE ON GOVERNMENT OPERATIONS, VETERANS AFFAIRS, AND CONSUMER PROTECTION EARLE B. OTTLEY LEGISLATIVE HALL ST. THOMAS, U.S. VIRGIN ISLANDS SEPTEMBER 22, 2025 BILL NO. 36-0102 DPP Testimony – Bill No. 36-0102 September 22, 2025 Testimony of Lisa Maria Alejandro, Commissioner of the Department of Property and Procurement Before The Committee on Government Operations, Veterans Affairs and Consumer Protection of the 36th Legislature of the Virgin Islands of the United States on September 22, 2025 Good morning Honorable Avery L. Lewis, Chair of the Committee on Government 1 Operations, Veterans Affairs, and Consumer Protection, to Vice – Chair, the Honorable Novelle 2 E. Francis, Jr., members of the Committee on Government Operations, Veterans’ Affairs and 3 Consumer Protection, non-committee members of the 36th Legislature, to the Bill’s Sponsors, the 4 Honorable Marvin A. Blyden and the Honorable Angel L. Bolques, Jr., employees of the 5 Department of Property and Procurement, fellow testifiers, Legislative Staff, and the viewing 6 and listening audience. 7 I am Lisa Maria Alejandro, Commissioner of the Department of Property and 8 Procurement (“DPP”). With me today in Chambers is Chief Legal Counsel Magdalene A. 9 Morancie, Esq. We are here, pursuant to your invitation, to provide testimony on Bill No. 36- 10 0102, “an Act amending title 31 Virgin Islands Code, Chapter 23, by re-enacting section 236b 11 requiring the use of construction materials manufactured in the Virgin Islands, to the greatest 12 extent practicable, for locally or federally funded contracts with the Government of the Virgin 13 Islands.” 14 The Department understands that Bill No. 36-0102 intends to establish a mechanism to 15 stimulate economic growth and the availability of construction materials and local contractors 16 to support all Government construction projects to include emergency and recovery response. 17 While the Department understands the intent of Bill, given the limited nature of construction 18 materials produced in the Territory, and considering that concrete, by its very nature, meets the 19 definition of construction materials produced in the Virgin Islands, and must be sourced locally, 20 we contemplate the effectiveness of the proposed Bill in achieving the intent of the Bill. 21 As we proceed with today’s discussion, we offer the following recommendations: 22 DPP Testimony – Bill No. 36-0102 September 22, 2025 1. Ensuring Compliance with the Terms of Federal Grant Awards 23 First, we recommend the addition of an exception in subsection (f), such that the 24 provisions of section 236b would not apply if they are not consistent with the terms and 25 conditions of the applicable grant funding the construction project. The Government of the 26 Virgin Islands receives grants from various Federal agencies, each of which may impose distinct 27 compliance requirements. As a result, it is necessary to ensure we recognize and preserve the 28 need to comply with the terms of those different grants to remain eligible for reimbursements 29 and drawdowns. The Department notes the reference in this Bill to the 1st Circuit Court of 30 Appeals’ 2012 decision in Antilles Cement Corp vs. Fortuno that upheld the language of a Puerto 31 Rico statute similarly requiring the use of local construction materials in locally and federally 32 funded government contracts. It is important to distinguish and note that the questions answered 33 by Antilles Cement Corp vs. Fortuno were specific to whether Puerto Rico was exempt from the 34 Buy American Act (“BAA”) and whether Puerto Rico’s statute with a 15% price variance and 35 allowance for local construction materials was preempted by the BAA’s 6% threshold. While the 36 Court determined Puerto Rico was not exempt from the application of the Buy American Act and 37 that the Buy American Act did not preempt Puerto Rico’s local construction materials statute, 38 that decision was not a blanket decision concerning all federal domestic preference laws, nor did 39 it consider the application of the terms and conditions of specific grants. 40 The addition of an exemption from the requirements of this Bill, to ensure compliance 41 with the terms of the varying federal grants is a reasonable request considering the breadth and 42 scope of federal grants our Territory receives and the existence of other domestic preference laws 43 such as the Buy America Act (Transportation related infrastructure)(1982) and Buy America 44 Build America Act (“BABA”) (2021), that were not contemplated in the analysis of the Antilles 45 Cement Corp vs. Fortuno decision. 46 2. Refine Application to Instrumentalities: 47 The Bill defines Government as the Government of the Virgin Islands, its departments, 48 agencies, and instrumentalities, and further provides that the provisions will apply to the defined 49 term. If the “instrumentalities” are meant to include the autonomous and semi-autonomous 50 instrumentalities of Government to include, the Water and Power Authority, Virgin Islands Port 51 DPP Testimony – Bill No. 36-0102 September 22, 2025 Authority, Virgin Islands Housing Finance and Housing Authorities, and the Waste 52 Management Authority, it is imperative that (1) they also be included in the discussion on a Bill 53 that would impact their operations and (2), in all instances throughout the proposed Bill, where 54 the Commissioner of DPP is referenced to carry out a particular function, the contracting officer 55 for the instrumentalities also be empowered and/or required to do the same, as DPP does not 56 procure goods and services for the instrumentalities based on the provisions of Virgin Islands 57 law. This recommendation is in line with the structure in title 31, chapter 23, section 236a, the 58 Preferred Bidders’ Statute, which applies to both the central Government and the 59 instrumentalities. 60 3. Balancing Costs, Responsibilities, and Operations 61 As we consider the re-enactment of section 236b, we must ensure we are balancing costs 62 throughout the life cycle of a construction project. Construction projects are typically line-item 63 projects issued pursuant to an Invitation for Bids, which are awarded to the lowest, responsive, 64 and responsible bidder, making price a critical factor in the award process. Under the Preferred 65 Bidders’ Statute, a preferred bidder is already afforded a 15% price variance on locally funded 66 construction contracts, allowing that bidder’s bid to be 15% higher than a non-preferred bidder 67 and still be awarded, provided that the bidder is also responsive and responsible. In balancing 68 costs, the Department recommends the addition of language to cap the variance at 15%, in total, 69 such that a bidder cannot be awarded under both Sections 236a and 236b, as that has the potential 70 for 30% price variance. 71 Secondly, as drafted Bill No. 36-0102, would allow a bidder to receive a 15% price variance 72 on locally sourced construction materials which will be factored in at the time of bidding and 73 award. However, at least two of the proposed exceptions, (1) the materials not being available in 74 sufficient quantities or (2) satisfactory quality, may not be known until after the contract has been 75 awarded and the project is underway. At this point, if the contractor sources non-locally produced 76 construction materials at lower costs, the contractor should be required to bill those services 77 while factoring in the cost savings, if any. 78 Third, because construction projects are typically awarded to the lowest, responsive, 79 reasonable bidder, and cost reasonableness is determined against an engineer’s estimate, the 80 DPP Testimony – Bill No. 36-0102 September 22, 2025 Government would need to complete estimates for materials based on whether they are locally 81 produced or imported. 82 Fourth, the Department of Licensing and Consumer Affairs’ license database is already 83 searchable; therefore, the Department posits that agencies and contractors can use that existing 84 tool to find companies in the Virgin Islands for locally sourced construction materials. Thus, 85 with that existing functionality, the Department recommends the deletion of subsection (e) and 86 the distribution of the availability list. 87 Lastly, with the preeminent need to address the housing shortage in our Territory, the 88 Governor is actively pursuing alternative methods of construction to include the use of 89 prefabricated materials produced outside of the Virgin Islands. Since we are at a point where 90 housing needs to be constructed rapidly, it is important for us to maintain avenues for sourcing 91 materials in the most efficient and cost-effective manner to meet the needs of our community. 92 This also underscores the need for input from the authorities responsible for housing 93 development. 94 4. Editorial Changes 95 (a) Subsection (a)(1)(7) – delete “and those funds provided by federal laws for the purpose 96 of revitalizing the economy” from the definition of “Public funds” as the text 97 immediately before it already captures funds from the Federal Government. 98 (b) Subsection (b) Call for bids – Change reference from section 235 to 236, as the 99 requirements for the invitation for bids are outlined in title 31, chapter 23, 236. 100 Additionally, for purposes of the instrumentalities, add a general reference to the 101 procurement requirement, as applicable to the instrumentalities. 102 (c) Subsection (g) – change factory to “supplier or manufacturer”. 103 Conclusion 104 In conclusion, Mr. Chair, we understand the intent of the Bill is to provide a pool of local 105 contractors and readily available construction materials to support our Virgin Islands 106 infrastructure projects. We remain in the throes of our recovery, modernization, and transition 107 to a more resilient landscape; therefore, we applaud the Bill’s sponsors for putting forth this 108 DPP Testimony – Bill No. 36-0102 September 22, 2025 measure aimed at facilitating that continued growth. We appreciate the opportunity to contribute 109 to this important conversation, and we would welcome an additional opportunity to engage with 110 all relevant stakeholders to refine the language of this Bill so that it can meet our collective needs. 111 Thus, DPP respectfully requests that the Bill be held for further development and discussion. In 112 closing, as we chart forward, we encourage all vendors to register with GVIBUY, the Territory’s 113 e-procurement platform, for ready access to information on all GVI solicitations, maintaining 114 current corporate documents, and the ability to submit bids and proposals. 115 Mr. Chair, this concludes my prepared testimony. Thank you again for the invitation and 116 the opportunity to be a part of today’s discussion. We remain available to answer any questions 117 the Committee may have. 118