The Guam Department of Education is withholding a disputed $20 million payment to Core Tech International over an expired contract and unexecuted change orders, officials told lawmakers Wednesday during the legislative oversight hearing.

Deputy Superintendent of Finance and Administration Services (DFAS) Frank Leon Guerrero disputed the characterization by the legislative Committee on Education, Libraries and Public Broadcasting that vendors were not being paid, citing the Education Financial Supervisory Council's meeting last Thursday.

"Two or three of the members of that committee commended GDOE for how well they are managing their accounts payable. ... Never before have we seen so many of the vendors paid on time," Leon Guerrero said.

He conceded outstanding payments to specific vendors, including autism services, which are federally funded.

"Take for example the autism community, who doesn't want to pay autism community. That's 90 days overdue. I can't pay it myself, federal funds can't pay," Leon Guerrero said.

He tied the nonpayment to alleged misuse of federal grant funds by the prior administration.

"The prior management team went to lunch at Capitol Kitchen, the prior management team went to lunch at Meskla. They wrote it on the invoices, lunch at Meskla, this and this and this. Pay it. We cannot pay that ... Federal funds can't pay for people who have personal lunches," Leon Guerrero said.

He also alleged that the prior administration attempted to alter documentation tied to a separate vendor identified as TinyEYE, the online therapy provider that provides occupational and speech therapy services to GDOE students with special needs based on their Individualized Educational Plans. Those services saw a brief suspension during school year 2025-2026 for nonpayment.

"Hundreds of thousands of dollars of invoices were not paid. They actually tried to hide it. They actually tried to get the vendor to change the invoices and make it seem that all the prior years' services that were provided changed the invoices to it just happened today, from years ago. That's falsification of government documents," Leon Guerrero said.

Leon Guerrero said part of the aging accounts payable backlog is tied to invoices still surfacing from the previous administration, noting the current leadership took over six months ago.

He cited additional factors, including failure to follow procurement processes, behind the nonpayment of specific vendors, namely Core Tech International, for the refurbishment of school facilities. He said the company continues to press for payment and has threatened legal action.

"If you don't pay me millions, I'm going to charge you late fees. If you don't pay me millions, I'm going to take you personally to court and sue you personally. Well, we're not paying. We have legal opinion to hold ... we're not buckling into arm twisting tactics," Leon Guerrero said.

He said the dispute centers on an estimated $20 million to $25 million the construction company says it's owed. Leon Guerrero maintained that the underlying contract had expired and the relevant change orders were never executed.

Core Tech International Chairman Ho Sang Eun disputed Leon Guerrero's characterization point by point.

"GDOE issued invitation to bid for four different reasons, covering 32 schools ... the total congregate amount is about $300 million. However, because of the funding matter, GDOE issued only 4 schools," Eun said.

He described the scope of the dispute: "We realized the given quantity throughout the bidding process was not accurate ... We explained to GDOE: we can stick to the specified quantity, that's the best way ... We will not incur any additional cost. However, GDOE asked with assurance that they have enough funding."

Eun confirmed that GDOE has owed Core Tech $20 million since 2024.

"We have not charged any interest for that amount. In fact, throughout the year and a half, GDOE had never raised questions about the numbers," Eun said.

He said the company continued the work in good faith.

"We continue our job for the safety for the students, but at the same time, GDOE finally issued ... to stop the job," Eun said.

Eun described a meeting with GDOE Superintendent Judith Won Pat over the nonpayment.

"We had one meeting, just one meeting, but Dr. Won Pat was not really familiar with the entire history ... I ask: could you please issue a letter in writing that GDOE will not have funding or does not have funding? Therefore GDOE cannot make the payment. Then [Core Tech] will take the next step, whether it's going to be a legal lawsuit, et cetera. We have never threatened GDOE to pay or not. We didn't talk about the interest," he said.

Eun pointed to the financial strain the dispute has placed on the company.

"We need to know. ... I don't know how many companies on island can sustain when there is a $20,000,000 unpaid invoice. We need to have a direction," he said.

Sen. Telo Taitague pressed GDOE on the lack of communication with the vendor, telling education officials they owed Core Tech "the decency, at least notifying the vendor of what your plan is moving forward ... not leave anybody hanging this long. It's been quite a while."

Leon Guerrero said the matter remains with the department's legal team and has not gone to court.

"It's not in the courts ... We are in lawyers' offices ... and we have advice from our lawyers, and that legal advice right now is to hold ... The advice right now from legal is to hold," Leon Guerrero said, adding that GDOE cannot pay for change orders made to a contract after its expiration.

The oversight hearing was recessed and will reconvene at a later date in July.