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Legislature urged to investigate Adjusters Int’l contract with Puerto Rico Housing Dept.

By on January 18, 2018

SAN JUAN – Leaders of the minority Popular Democratic Party in the House and Senate urged the Legislature Wednesday to begin an investigation of the $132.8 million contract between the Puerto Rico Housing Department (PRHD) and Adjusters International to rebuild homes destroyed by Hurricane Maria.

During a press conference, Sen. Eduardo Bhatia and Reps. Rafael “Tatito” Hernández and Ramón Luis Cruz questioned Adjusters International’s compliance with various requirements established by the request for proposal (RFP) for Housing’s Tu Hogar Renace program.

The contract, awarded after a bidding process, is already being contested by AECOM, which also competed. During an administrative hearing last week, AECOM presented its arguments against Adjusters International obtaining the contract, which is funded by the Federal Emergency Management Agency (FEMA).

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Housing Secretary Fernando Gil Enseñat, meanwhile, rejected allegations from the PDP legislators, saying there were no irregularities in the bidding process.

“At the Housing Department, all processes are conducted according to law and applicable regulations, always safeguarding the best use of public funds. Furthermore, for our administration, transparency is vital in the granting of any contract. At the PRHD, we reiterate, that to guarantee the best public interest, we always comply with all federal and state regulations,” Gil Enseñat said in a written statement.

As for AECOM’s process in disputing the contract, the Housing secretary maintained “it is important to highlight that the arguments of the losing proponent that are raising controversy, and which are going to be appropriately adjudicated by the proper forums, do not affect the technical capacity or pricing of the selected company.”

Likewise, Gil indicated that Adjusters won the contract because it presented a less expensive option than what AECOM presented.

Many of the arguments presented by the PDP legislators concur with those presented by AECOM to contest the procurement process, including questioning Adjusters’ liquidity.

As established by the RFP, bidding companies were required to have at least a $35 million unencumbered line of credit. While Adjusters has a credit line for $35 million, only $9 million was available, according to the document.

Another requirement was to have General Services Administration (GSA) certification, which indicates a company is authorized to do business with the government. Hernández said Adjusters did not have this certification and, when submitting its RFP documents, did not have a certificate of incorporation from the State Department.

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Hernández also expressed concerns regarding Adjusters not having undertaken a joint venture on the island, but was awarded the 10 points in the bidding process to companies associated with a local company.  

Having a local partner “is used to minimize risk, to have, obviously, the experience of a local company, and to give substance to the company that will offer the service with knowledge about the territory where they will be provided,” said House Minority Whip Cruz.

After presenting their concerns, Bhatia questioned why the contract was not awarded to any of the other three companies that competed for Tu Hogar Renace funds.

“There were other companies that complied with all [requisites], but the one that won didn’t comply with any of these,” the Senate PDP minority leader questioned. “Then, the question is why? How is it that this company, which didn’t comply with the basic requirements of the bidding process, has ended up becoming the winner of this $132 million bid.”

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