Tuesday, September 25, 2018

Fiscal board amends Puerto Rico gov’t contracts review policy

By on July 3, 2018

SAN JUAN – The Financial Oversight and Management Board for Puerto Rico has amended its Nov. 6, 2017, policy on island government contracts greater than $10 million to not only require more documentation for the panel’s review, but also to include judiciary and legislative branch contracts.

Any intent by the commonwealth’s government–including the executive, judiciary and legislative branches–and instrumentalities that are overseen by the board to pursue those large contracts or “grants, sub-grants, and tax abatement or similar tax relief
agreements,” must now include a copy of the “Contract Submission Questionnaire, the Agency Certification Requirement, and the Contractor Certification Requirement.”

The board also reserves the right to “require additional information during the course of its review,” it emphasized in its published announcement.

“Oversight of Puerto Rico’s government contracting processes is needed to increase effectiveness and transparency of public sector finances and increase the public’s faith in this process,” the board’s executive director, Natalie Jaresko, said in Tuesday’s release. “The new policy will promote market competition and ensure that all contracts are in compliance with the Fiscal Plan for restoring Puerto Rico’s economic and financial health.”

The new policy is retroactive in that “contracts executed prior to date of adoption of this policy shall also be subject to review to ensure that they do not adversely affect compliance with the Fiscal Plan.”

The board said it has requested that the Puerto Rico Fiscal Agency and Financial Advisory Authority (AAFAF) provide a “list of contracts and certifications from each contractor setting forth compensation, third-party relationships, potential conflicts of interest and any actions with the purpose of influencing public officials in connection with procurement, negotiation or execution of a contract.”

The board added that while it “retains the authority to expand the scope of its review,” does not expect to “engage in legal review of the contractual documentation or the contracting process, to avoid duplication of efforts and in light of improvements to the contracting process from various agencies, such as the work being performed by the Office of Contract and Procurement Compliance (OCPC).”

The release further details that the “Oversight Committee will continue to also focus its review on Fiscal Plan compliance and, in the case of disaster aid spending, will provide observations regarding the eligibility for federal funding and/or reimbursement. Also, the FOMB will not engage in any due diligence or background check with respect to the contracting parties nor review whether the contracting parties comply with the requirements under the applicable contract, which is the agencies’ responsibility.”

The fiscal board said it will update its website’s Resources Section to include a “Contract Review Process” page with the amended policy and a “status report of each contract under review, including, but not limited to, the name of the contracting party, the date of submission, the date of any response from the Board or from the contracting party, and a copy of all the Board’s formal responses.”

A copy of the board’s final response for all contracts reviewed before its new policy will also be published, the panel said.

In the same release, the board announced that “updated financial interest disclosure forms, including quarterly financial disclosures for the first quarter of 2018, covering the three-month period ending on March 31, 2018 and the 2017 Annual Financial Reports for members of the Board and its executive staff have been publicly released and posted on the Board’s website.”

Chairman José Carrión added that changes to the Annual Financial Reporting Form and related instructions have been implemented for “Bylaws and good practice, to clarify certain concepts, and in response to feedback received from various stakeholders over the past year.”

The full text of the amended contract review policy can seen here found on the board’s website, www.oversightboard.pr.gov.

Puerto Rico fiscal Board to review gov’t contracts of over $10 million


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