Dive Brief:
- CNN reports Puerto Rico officials are requesting $10 million in federal funds to pay Whitefish Energy, the small Montana company that landed a big contract to rebuild the island grid before the arrangement came under intense scrutiny and was canceled.
- The cable network reported that word of the request came yesterday from the Puerto Rico Electric Power Authority, after a federal official told a Senate committee on Homeland Security that no funds had been used to pay Whitefish.
- At least two congressional committees are looking into the issue, as is the Federal Emergency Management Agency and the Federal Bureau of Investigation. The $300 million contract awarded Whitefish to repair damage from Hurricane Maria was procured without competitive bidding and many of the terms have alarmed observers.
Dive Insight:
PREPA is preparing to cancel the Whitefish contract, following intense scrutiny and backlash over the procurement and terms. But the small firm has been working on the island since early last month, and the utility says it needs to pay for that work.
FEMA Administrator Brock Long told lawmakers on the Senate Committee on Homeland Security and Governmental Affairs that "no lawyer inside FEMA would ever have agreed to some of the language in that contract."
The contract includes an employee per-diem in excess of $400, as well as a passage ensuring that, "In no event shall [government bodies] have the right to audit or review the cost and profit elements." Signed by PREPA Executive Director Ricardo Rodriguez and Whitefish Energy Holding CEO Andy Techmanski, the contract also specified that Puerto Rico cannot make a claim against Whitefish for work delays or completion.
Whitefish, which had only two full-time employees before the PREPA contract, hails from the same Montana town as Interior Secretary Ryan Zinke. That potential connection to the Trump administration added fuel to the controversy, with a bipartisan group of lawmakers from both houses of Congress calling for further investigation last week.
To replace Whitefish workers, Puerto Rico has requested mutual aid agreements with Florida and New York. Whitefish defended its performance in a statement, saying it had mobilized 350 workers to the island so far.
“The original decision by PREPA to have Whitefish Energy come to Puerto Rico only sped up the repairs, and if it were not for that action, crews would just now be getting to the island to begin the process of rebuilding the system and restoring power,” the company said.
Under the contract terms, PREPA must notify Whitefish 30 days in advance of terminating the deal. The Montana company will cease work after it reaches an agreement with PREPA to hand over control of two transmission lines it is currently repairing, according to Caribbean Business.
