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US Congress, executive branch look into Whitefish contract

By on October 27, 2017

By María Soledad Dávila and Yanira Hernández Cabiya

SAN JUAN – Hours before arriving in Puerto Rico to directly observe the damages caused by Hurricane Maria, the chairman of the U.S. House Natural Resources Committee, Republican Robert (Rob) Bishop announced that his committee was investigating the contract granted by the Puerto Rico Electric Power Authority (Prepa) to Whitefish Energy to repair the island’s electrical grid.

This would be the second federal investigation of the controversial contract that, according to the Natural Resources Committee, was awarded the same day Maria made landfall, virtually destroying the island’s transmission and distribution lines.

House Natural Resources Committee Chairman Rep. Rob Bishop, R-Utah, speaks on Capitol Hill in Washington during the committee’s markup hearing on the Puerto Rico Oversight, Management, and Economic Stability Act. (AP Photo/Evan Vucci, File)

More than a month after the hurricane, Prepa says it been able to restore about 28% of its power-generation capacity, but service, which the utility says it cannot quantify, is said to be reaching a lower percentage of customers.

In a letter published by the House committee and sent to Prepa Executive Director Ricardo Ramos, Bishop requests all documentation related to Whitefish’s contract be sent no later than 5 p.m on Nov. 2.

The document states that the $300 million contract signed with the small, Montana-based  company “is the largest single contract awarded for relief efforts in the wake of Hurricane Maria,” and that, “the size and terms of the contract, as well as the circumstances surrounding the contract’s formation, raise questions regarding Prepa’s standard contract awarding procedures,” reads the congressman’s letter.

 

Ramos must submit to the Natural Resources Committee, which has jurisdiction over Puerto Rico affairs in Congress, all documents that show the circumstances that led Prepa to allegedly “deviate from normal contracting and procurement process.”

In addition, it must indicate which officials must approve such exceptions, as well as provide all documents and communications pertaining to both the master agreement, dated Sept. 20 and its first amendment entered Oct. 17, the letter says. The contract signed on Oct. 17 indicates that the initial master agreement was finalized Sept. 26, differing from Bishop’s letter.  



Whitefish Contract Signed 10 17 Rev (Text)

In addition, Ramos must submit all records, documents, data and communications that relate to the Emergency Master Service Agreement for Prepa’s Electrical Grid Repairs, demands the letter, which was also signed by the chairman of the Subcommittee on Oversight and Investigations, Bruce Westerman.

The investigation comes after the Natural Resources Committee had rescheduled a hearing on the island’s fiscal situation expected to include the evaluation of the emergency’s management.

Puerto Rico gov’t to appeal Prepa ‘transformation officer’ designation

Precisely on Thursday evening, the fiscal control board, at the request of the committee, submitted an urgent motion before federal Judge Laura Taylor Swain, who presides over Prepa’s debt case, an urgent motion to authorize the designation of a “chief transformation officer” to oversee the public corporation

The Natural Resources Committee’s investigation will include reviewing the Pepa’s decision to circumvent the mutual aid agreements signed with the American Public Power Association (APPA).

In the letter, members of Congress argue that the federal government could establish additional measures to ensure that taxpayers’ money is spent effectively and that the island’s recovery is effective and continuous.

The second investigation was begun by Gov. Ricardo Rosselló. He asked the inspector general of the Department of Homeland Security, John Roth, that any request from FEMA be provided as soon as possible for the agency to conclude its review process, according to the letter, in which he also requested Roth’s office complete its review of the contract so a final determination can be made about it and address any other related issues by Monday, Oct. 30.



Carta RR PáG 1 (1) (Text)

The governor also said that on Tuesday representatives and lawyers from the Federal Emergency Management Agency (FEMA) held a three-hour call in which Prepa legal representative Greenberg Traurig had to answer questions about the contract.

At the end of the call, the FEMA team concluded that it will want to follow up with additional questions and information requests on the procurement process, but that it had no comments on the Whitefish contract at that point since it appeared to comply with FEMA regulations, the document says.

However, a statement posted on Twitter by FEMA deputy director of public relations, Eileen Lainez, indicates that the federal agency has significant concerns regarding how the contract was awarded and cannot confirm whether the agreed-to costs are reasonable.

She also confirmed that both FEMA and Prepa legal advisers were discussing details of the contract. The statement further contends that FEMA has not yet disbursed any funds to reimburse Prepa for the costs incurred in the mobilization of this contract.


Curiously, in a press conference Thursday in which the secretary of Public Policy, Ramón Rosario, was present, Alejandro De La Campa, Caribbean Area division director, FEMA Region II, indicated that his agency “isn’t reviewing any contract at the moment.”

The Whitefish Energy contract is aimed at restoring the island’s electrical grid, for which it must provide personnel and materials and should have been overseen by the U.S. Army Corps of Engineers (USACE).

In an Oct. 10 press conference, Secretary Rosario said that USACE supervision was part of the FEMA’s reimbursement approval process.

“All the work that is being done with the contracting of companies, the Corps of Engineers is giving us expert assistance and are the people FEMA has delegated for that process of reimbursement to do the expert analysis,” Rosario said.

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