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USACE ‘approaching limit’ on $1.3 billion contract with Fluor to repair Puerto Rico power grid

By on February 16, 2018

SAN JUAN – While hundreds of thousands in Puerto Rico still wait in the dark for power lines to be repaired, it was confirmed Friday that Fluor Corp., which was hired by the U.S. Army Corps of Engineers (USACE) to support the restoration of the island’s electricity grid after two-thirds of it was destroyed by Hurricane Maria, will reduce its staff numbers and adjust its work plan.

The decision, confirmed by USACE, is due to the fact that the funds granted by the federal government for the operation are beginning to reach their peak.

“USACE and the Government of Puerto Rico remain committed to the restoration of the island’s electrical system. As you may have heard, some of the line workers will start leaving Puerto Rico. This is part of a responsible reduction of our current workforce to make good use of federal taxpayers’ money.

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“One of the reasons for this is we are currently approaching the financial limit in the Fluor contract. USACE did not cancel the Fluor contract and will continue to execute its existing contract, but funds to increase capacity are not available,” USACE spokesman Ed Rivera said in a written statement.

However, on Thursday, Metro sources said the reason for winding down Flour’s work on the island was related to the lack of production and execution by the company, which makes sense since the USACE spokesman stated that the work of other contracted companies will not be reduced.

“Fluor is managing our workforce to both our remaining work scope and contract terms. As a result, we are beginning to reduce our foot print on the island in coordination with the Army Corps of Engineers,” Fluor said in a written statement Friday afternoon.

“Our contract has a specific period of performance and funding level. We are starting a phased and measured transition in order to meet the funding obligations of our contract. There is nothing unusual about this. It is a normal part of the life cycle in large government contracts that require steep ramp up at the beginning of the project.
Fluor crews will remain on the ground and working to complete assignments until the end of our period of performance in April,” it added.

USACE awarded Fluor three contracts for a combined $1.3 billion to repair and replace grid structures and equipment, making it the highest compensated contractor among those working on the island’s grid-restoration efforts in the aftermath of Maria. Part of the tasks assigned to Fluor were initially given to Whitefish Energy Holdings, whose contract was canceled amid allegations of irregularities.

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In addition to Fluor, the Corps of Engineers has a contract with PowerSecure ($88 million) and Weston Solutions ($35.1 million) to rebuild the most complicated parts of the island’s grid.

In January, Fluor had recruited about 1,900 employees and was reportedly expected to hire another 500 people.

“Fluor has begun to reduce its workforce and has provided a plan that allows them to complete as many lines as possible. Fluor plans to complete 70% of the lines that were initially assigned to them, before leaving the island,” Rivera added, noting that the work plan is being revised to incorporate advances in the Arecibo, Bayamón, Caguas, Carolina and San Juan regions.

As of Friday, 76.41% of Prepa customers have power service, which means that more than 400,000 remain in the dark five months after the hurricane.

“The Corps of Engineers, Prepa and the Energy Restoration Coordinator of the island are in the process of reassigning the remaining work to others in order to achieve our goals of restoring electricity to 90-95 percent of customers on the island before March 31,” Rivera said.

Besides USACE’s contracts with the other companies, such as PowerSecure, which has some 3,000 workers in Puerto Rico, “new contractors continue to arrive in Puerto Rico and add to that number,” Rivera said.

About 1,200 of Fluor’s workers are expected to leave the island in the coming weeks.

“The scheduled departure of some of the workers will not have a negative impact on the unified efforts for energy restoration. The focus of USACE and the unified command is to securely and urgently restore power for the people of Puerto Rico and there will be a deliberate repositioning of assets in Caguas and Arecibo,” the USACE spokesman added.

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