The Players Behind the Companies Commissioned for Puerto Rico’s Recovery
The 20 companies that have received most of the money in federal government contracting for recovery work in Puerto Rico after Hurricane María, include firms whose staff lacks the expertise to do the commissioned work, companies involved in the island’s fiscal crisis, and others with formal accusations for inefficiencies and breach of contracts.
Some of those companies are partners or are associated with others having the same owner or have established joint ventures or consortiums for projects to be carried out post-María.
Out of 944 companies, 18 are based in the United States and two in Puerto Rico, Xperts and Ranger America. Those are the 20 firms that have landed the highest federal contracts, according to the official information included in the “Hurricane María Contracts” document posted on the Federal Procurement Data System (FPDS) page. The federal agencies that lead as contractors are the U.S. Army, through the U.S. Corps of Engineers, and the Federal Emergency Management Agency.
At the top of the list are Fluor Enterprises Inc., The Louis Berger Group Inc., Powersecure Inc., Weston Solutions Inc., Dyncorp International LLC, Xperts Inc., Disaster Solutions Alliance LLC, Ceres Environmental Services Inc., AllTech Inc. and Vanguard Emergency Management Housing Inspection Services.
The list of companies and contracts on the FPDS page only provides information on the hiring done by federal agencies for recovery work, it does not include contracts made by the government of Puerto Rico.
Business ownership conglomerates
On the list of the 20 companies that have pocketed the most, three have administrative links or have formed joint ventures to work in Puerto Rico with California-based AECOM, the CPI uncovered. Formerly known as AECOM Technology Corporation, this multinational corporation specializes in engineering services, which include city planning, construction of bridges and buildings, defense services, and infrastructure projects.
Disaster Solutions Alliance, based in Germantown, Maryland, stands out among the companies linked to AECOM. It ranks seventh on the list and as of June 2019 it had a total of some $180 million for food distribution to hurricane victims in Puerto Rico.
The firm NISTAC E also appears to be based in Germantown and has the same office number as the Disaster Solutions Alliance. The AECOM branch in Germantown, Maryland, 40 minutes from Washington DC, also has the same address.
NISTAC E occupies the 17th place, with $73 million. It specializes in engineering services and infrastructure support. Like Disaster Solutions Alliance, NISTAC E is a company FEMA hires for recovery work after major atmospheric events.
Both NISTAC E and Disaster Solutions Alliance are mentioned on web pages where they share the same telephone number.
On a call to that number, the CPI asked if that was the AECOM office in Germantown, Maryland. The answer was yes. The CPI then asked about the link between NISTAC E, Disaster Solutions Alliance and AECOM. The AECOM employee said she could not provide such information.
In another call, the CPI requested to speak with an AECOM communications or public relations officer. Michael Chee, who serves as senior media and community relations administrator for the corporation’s main office, located in California, spoke with the CPI.
“Some of the companies that you are looking into are what we call a joint venture,” said Chee, after being asked about the relationship between NISTAC E and Disaster Solutions Alliance with AECOM.
“We have completed most of the assignments,” he added in reference to the work for which AECOM and its subsidiaries were hired in Puerto Rico.
Chee said he didn’t know about the two Germantown companies.
After being asked why both companies were located in the same office within the AECOM building in Germantown, Chee replied that when joint ventures are established for specific projects, FEMA sends all correspondence to the office of one of the members of the joint venture to avoid duplication in the distribution of information. However, the CPI confirmed that the Germantown address of the NISTAC E and Disaster Solutions companies appears in all sorts of documents and references besides FEMA.
A third company linked to AECOM — AECOM Recovery, based in Arlington, Virginia, also minutes from Washington DC — appears on the list. Among the top 20 companies, AECOM Recovery ranks 14th with $83 million. If the contracts awarded to NISTAC E and Disaster Solutions Alliance, also linked to AECOM, are added up, this company and its subsidiaries would end up in 4th place with $337 million in awarded contracts.
AECOM Technology Corporation became AECOM in 2015, after acquiring URS Corp and all of that company’s subsidiaries, including URS Group, based in San Antonio, Texas. The latter was also commissioned for jobs in Puerto Rico in 2014, although it is not among the top 20.
URS Corp is the company that audited the Puerto Rico Electric Power Authority (PREPA) in 2013, and at the same time participated in the public corporation’s bond issuance.
AECOM, Atkins also land Puerto Rico government contracts
In addition to the federal contracts granted to AECOM and its subsidiaries, the government of Puerto Rico has hired the company’s local subsidiary, AECOM Caribe, based in San Juan, six times as of January 2018. The Puerto Rico Ports Authority, the Puerto Rico Planning Board and the Puerto Rico Highways and Transportation Authority awarded $1,017,535 in contracts to that company from January to December 2018 for engineering and geology, and administrative consulting and infrastructure services, according to the Comptroller’s Office Contracts Registry database.
While excluded from the FDPS’s list, the Puerto Rico Department of Housing (DH) granted a $22,384,943, three-year contract to the AECOM Technical Services subsidiary in July 2019. The funds come from the U.S. Department of Housing and Urban Development’s Community Development Block Grant – Disaster Recovery program (CDBG-DR). AECOM Technical Services will work in 17 municipalities along Puerto Rico’s southern and southeast regions. The company is one of the four firms hired by the Department of Housing Repair, Reconstruction or Relocation Program (R3).
One of AECOM Caribe’s lobbyists is Elías Sánchez, the governor’s campaign manager and former representative before the Fiscal Control Board, who is under investigation at the federal level for alleged sale of influences and had a leading role in a corruption schemethat led to Gov. Ricardo Rosselló’s resignation. AECOM has said that Sánchez is only a consultant for the company, but several CPI sources said he is its lobbyist, as Puerto Rico Housing Secretary Fernando Gil-Enseñat, confirmed to the CPI. The $22 million contract recently granted to AECOM Technical Services includes the same address as AECOM Caribe in San Juan.
Gil-Enseñat was asked if Sánchez had any communication with the DH about the contract awarded to AECOM Technical Services. “There was no communication with him or any other contractor,” he said.
“These companies were selected after determining that they had the necessary technical expertise and after determining that the proposed costs for the services were reasonable, considering the terms and conditions of the RFP (Request for Proposal),” Gil-Enseñat said in a written statement sent to the CPI.
Chee of AECOM said there was no lobbyist or representative of AECOM Technical Services hired to get the contract for the R3 Program. However, he admitted that WP Group was hired as a representative of AECOM. Elías Sánchez was part of that firm for eight years until his recent departure on July 16, 2019, two days after the CPI published The 889 pages of the Telegram chat between Rosselló Nevares and his Closest Aides. AECOM terminated its contract with WP Group last July 22, two days after Sánchez’s departure, Chee said.
Although the AECOM contracts with the government of Puerto Rico do not appear in the FPDS document, nor do they alter the figures or the order of the top 20 companies, that information reveals the corporation’s leading role in the recovery work. If all the contracts with AECOM and its subsidiaries for recovery works granted by the federal and Puerto Rico governments are added up, the total would be some $360 million.
The CPI contacted Sánchez by email to clarify his current connection with AECOM Caribe and AECOM Technical Services, and if the federal investigation includes his link with this company, but received no response from the attorney.
Disaster Solutions Alliance was founded in 2006 as part of a consortium between URS (now AECOM) and Atkins. In 2012, Atkins hired it to provide temporary residences to families in New York after Hurricane Sandy.
Atkins is the parent company of San Juan-based Atkins Caribe LLP. In October 2010, Atkins acquired PBSJ Corporation, including its affiliate in San Juan, PBS&J Caribe, creating Atkins Caribe.
In January 2019, the Planning Board (JP) announced the update of the mitigation plans of Puerto Rico’s 78 municipalities. It awarded a contract for $1,748,786 to Atkins Caribe to lead the process.
Claims and investigations into companies contracted by FEMA
Several of those companies have longstanding ties with federal agencies, including FEMA and the U.S. Department of the Army. The relationship precedes the contracting associated with Hurricane María. Some continue to benefit from large contracts despite questionings about how they handled past crises.
Another of the companies on the list is AllTech, based in Herndon, Virginia, which ranks ninth. Through June 2019, it had secured $120 million in FEMA contracts. The relationship between FEMA and AllTech precedes the current decade. In 2004, the company was hired to handle the recruitment of home inspectors in Florida, following the hurricanes that hit that state that year.
People hired by AllTech in Florida did not receive adequate training to handle family inspections and claims, the Sun Sentinel reported.
Similar complaints were made by many Puerto Ricans here who were denied individual FEMA assistance.
FEMA said inspectors are rigorously evaluated prior to their selection.
“In the case of inspections, FEMA relies on a variety of sources to determine an applicant’s eligibility for financial assistance from FEMA, and one method is by sending an inspector to inspect an applicant’s damaged residence,” Abigail Dennis, a stateside FEMA spokesperson, told the CPI.
“In the case of home inspectors, FEMA requires contractors to hire, complete security checks, train, and equip its inspectors. FEMA routinely conducts quality assurance checks on inspector training and documentation of damages,” Dennis added.
As with AECOM and its affiliates and subsidiaries, AllTech represents another case of concentration of capital. The company is now part of WSP, a corporation with a global presence that also acquired The Louis Berger Group, a company that appears in second position among those with the highest amount of federal contracts after María. As of June 2019, The Louis Berger Group had received almost $543 million. That amount is added to the more than $120 million received by AllTech, which is now also part of the WSP brand.
The accusations against FEMA for awarding contracts to companies without the credentials to manage post-disaster situations resurfaced after it granted three contracts worth $70 million to Tribute Contracting LLC for food delivery in Puerto Rico. The Georgia-based company had never worked on a scenario such as the one found in the island. Instead of delivering the 30 million bags of food for which it was hired, Tribute barely distributed 50,000. The breach forced the federal government to withdraw the contract. However, Tribute Contracting appears 18th on the list of favored companies for the money that it had already received.
Another company hired in Puerto Rico by FEMA — and investigated by the federal government in 2018 — is Louisiana-based Macro Companies, which occupies the 13th place among the companies that have received the most federal money. After being investigated by the U.S. Department of Labor, Macro Companies was forced to return $1,151,219 to its workers when it was proven that it violated agreements related to overtime pay.
The CPI asked FEMA about its criteria for contracting companies despite having been investigated for past work.
Dennis said many of these contracts are awarded long before services related to a specific disaster are requested.
“Regarding the Tribute contract, their contract was cancelled. FEMA, in many cases uses pre-positioned contracts, which are awarded months or years prior to being used,” said Dennis.
Dennis was asked why these companies, that have been under scrutiny for their lack of expertise handling emergency situations, still qualify for those pre-positioned contracts.
She said the principal criterion is that they are in good standing with the Federal Acquisition Regulation (FAR) office.
However, she could not specify whether FEMA investigates the track record of the companies it hires, beyond checking if they’re in good standing with the federal government.
“FEMA follows the same legal federal contracting process as other federal agencies,” Dennis said.
Appearing in the 16th position is Carnival Corporation, which received $74.7 million from FEMA to lease the Fascination cruise ship that would house 2,056 workers assigned to Puerto Rico for post-Hurricane María recovery work. However, only about 800 people per night were staying on the cruise. Carnival representatives said they did their part to provide the vessel.
FEMA alleged to the CPI that there were actually “1,400-1,800 response workers housed” on the cruise ship but when the CPI asked for evidence, Dennis said the information would have to be requested through the federal Freedom of Information Act.
“Using tools such as SAM.gov, all contractors are determined to be responsible prior to award in accordance with the Federal Acquisition Regulation prior to award. Our focus always remains on providing the maximum support to disaster survivors, while also being mindful of our responsibility as stewards of taxpayer dollars,” said Dennis.
Rafael R. Díaz Torres is a member of Report for America
Brenda León and Cristina Del Mar Quiles contributed to this story.
–The Center for Investigative Journalism (CPI by its Spanish initials) is a nonprofit organization that trains journalists and has a legal program to help it in its objective of “working for freedom of information in Puerto Rico.”
–The views expressed do not necessarily reflect those of Caribbean Business.