FEMA has 'significant concerns' with Puerto Rico's $300m power deal
Source: The Hill
FEMA has significant concerns with Puerto Ricos $300m power deal
BY TIMOTHY CAMA - 10/27/17 09:58 AM EDT
The Federal Emergency Management Agency (FEMA) is sounding an alarm over Puerto Ricos $300 million contract with a small Montana company to restore power infrastructure, amid concerns over the firm's tiny staff and lack of competitive bidding.
FEMA will be responsible for paying for the work by Whitefish Energy Holdings, but the Puerto Rico Electric Power Authority (PREPA), the islands utility, entered into the contract.
According to FEMA, yes: "Any language in any contract between PREPA and Whitefish that states FEMA approved that contract is inaccurate."
Link to tweet
Based on initial review and information from PREPA, FEMA has significant concerns with how PREPA procured this contract and has not confirmed whether the contract prices are reasonable, FEMA said in its statement. ... FEMA is presently engaged with PREPA and its legal counsel to obtain information about the contract and contracting process, including how the contract was procured and how PREPA determined the contract prices were reasonable.
The agency also said that the contract is between Whitefish and PREPA, and FEMA had no role in its signing.
Read more: http://thehill.com/policy/energy-environment/357486-fema-has-significant-concerns-with-puerto-ricos-300m-power
Editing: I'm moving the Reuters article from the main box to this box and putting The Hill article as the lead story. It was earlier, and it has more information.
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https://www.reuters.com/article/us-usa-puertorico-power/fema-cites-significant-concerns-with-puerto-rico-energy-deal-idUSKBN1CW1X1
OCTOBER 27, 2017 / 9:40 AM / UPDATED 28 MINUTES AGO
FEMA cites significant concerns with Puerto Rico energy deal
Reuters Staff 1 MIN READ
WASHINGTON (Reuters) - The Federal Emergency Management Administration on Friday said it did not approve a multi-million dollar contract between Puerto Ricos power utility and a small Montana firm to repair storm damage, and has significant concerns about the deal.
In a statement, FEMA also said after its initial review it has not confirmed whether the contract prices are reasonable under the contract between Puerto Rico Electric Power Authority (PREPA) and Whitefish Energy Holdings.
madaboutharry
(40,231 posts)I would be shocked if Interior Secretary Zinke didn't engineer this ridiculous deal with people from his hometown in Montana. The whole think stinks.
Stephanie Rhule on MSNBC had a spokesman from Whitefish Energy stammering this morning as he tried to insist the deal was totally legit. He tried to argue no other company wanted the contract. Stephanie wasn't buying it.
Stryst
(714 posts)One of Zinke's sons just did a summer job with them. Which I'm SUPER sure is just a coincidence.
jpak
(41,760 posts)lark
(23,162 posts)Besides $$ for Zinke, bet there was some hand-off to the governor. We already know Zinke is both a Repug ass and personal profiteer and it sure seems that the governor or PR is the same since he approved this heinous, bad for PR. bad for Americans contract.
Eyeball_Kid
(7,434 posts)Our tax dollars at work.
dalton99a
(81,635 posts)lark
(23,162 posts)Did you notice that they are billing "hourly" rates, what a rip-off scheme that is. They don't actually have to do anything at all, just bill. They should have set this up as "rebuild entire PR electrical grid" within 3 (6?) months, have all hospitals online iwthin a month, etc, etc. and pay for meeting these milestones. This hourly stuff is an insanely bad idea for people of PR, will anything at all get done?
Dems need to hold immediate hearings on this and file a lawsuit to overturn this blatant profiteering from Zinke and friends.
wiggs
(7,819 posts)if the 300 million adds to PR's debt it would be exactly what we've done to third world countries for decades.
We lend money to poor countries for 'infrastructure improvements' that don't benefit the people because: the money goes for improvements that benefit a corporate interest such as a manufacturing plant that needs a dam built; the contracts are given to global firms, not local firms; and a fair amount goes to graft, corruption, and pocket lining. Everyone wins except the country which is then saddled with more debt and becomes a slave to the US or World Bank for UN votes, more contracts, etc..
Highly recommended reading.
lostnfound
(16,192 posts)Igel
(35,362 posts)while locals were the ones who put out a request for bids, negotiated and signed the contract.
We're doing pirouettes around the fact that it was PR officials of a PR-owned power company that signed the deal because we don't want to blame the victim.
Marthe48
(17,044 posts)This contract stinks. A company less than 2 years old, with 2 employees, $300 million dollars? Whitefish will have steak for dinner and P.R. citizens will have cold beans.
Frustratedlady
(16,254 posts)Or, am I missing something?
Once it was announced, we knew something was fishy. Young company with 2 employees? Did they work off a card table on top of it? Hell of a lottery to pull off this deal.
Freethinker65
(10,064 posts)I think they deserve a big thank you.
mahatmakanejeeves
(57,656 posts)It's hard to say who reposted it first.
Let's say The Wall Street Journal., The Hill, the Washington Post, etc. all got the statement at the same time. It's now a contest to see who is the fastest typist.
Freethinker65
(10,064 posts)I thought I read about it here in a link several days ago from an alternative press type site. Regardless, it is nice someone is doing the job that government employees used to do. It is also nice that the media picked up on it.
mahatmakanejeeves
(57,656 posts)I didn't pay any attention to it at the time. I saw the article in the Flathead Beacon, but it didn't seem that interesting. I didn't bother to post a thread about it, not until after people started asking questions. Here's my thread from the Montana forum, started at 9:52 a.m. on Tuesday, October 24, 2017:
DU thread: Whitefish Company Tapped to Rebuild Puerto Rico Power Grid
* * * * *
Two-year-old company brokered $300 million contract with islands electric utility
BY TRISTAN SCOTT // OCT 21, 2017
A Whitefish-based energy outfit is playing a key role in restoring power on the hurricane-ravaged island of Puerto Rico, a windfall for the relatively untested Montana company, whose CEO said it is well-equipped for such a massive undertaking in the rural and rugged region.
Officials with Whitefish Energy Holdings say the companys experience and expertise working in the Mountain West, and CEO Andy Techmanskis 20 years rebuilding transmission lines here, furnishes crews with a skillset uniquely tailored to meet the challenges of repairing and reconstructing electrical transmission infrastructure on the islands mountainous terrain, which Hurricane Maria rolled across last month, killing at least 49 people and leaving the majority of the island without power and in the dark.
Last month, the company signed a $300 million contract with the Puerto Rico Electric Power Authority (PREPA) to repair and rebuild 100 miles of transmission lines on the western portion of the island, and hopes to start turning some of the lights back on in the coming days.
....
Formed in 2015 by Techmanski, Whitefish Energy began eying the former site of the Columbia Falls Aluminum Company as a potential campus to build a transformer manufacturing plant, in partnership with Brazil-based Comtrafo S.A., a leading transformer manufacturing firm. At the time, Techmanski estimated the company would need to generate $15 million to $20 million in backorders with regional utilities in order to justify the manufacturing center, which so far has not panned out.
What happened next was that trade journals, such as Utility Dive and E&E News, started asking, "who?"
....
The House Committee on Natural Resources is examining Whitefishs role in Puerto Rico, said Parish Braden, a spokesman for the committee. The hiring of the little-known company has been noted by the trade publications Utility Dive and E&E News.
....
This comment to the Flathead Beacon article showed up two days later:
Sounds like a nice $300 million payoff to one of Zinke's friends:
https://www.washingtonpost.com/national/small-montana-firm-lands-puerto-ricos-biggest-contract-to-get-the-power-back-on/2017/10/23/31cccc3e-b4d6-11e7-9e58-e6288544af98_story.html
Like · Reply · 2 hrs
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Other links:
Freethinker65
(10,064 posts)dalton99a
(81,635 posts)Tom Rinaldo
(22,917 posts)Somehow seeing how word slowly filtered up from a small regional newspaper to a few inquisitive trade journals and then finally started to break in the national press makes this all somehow more vivid. This was not supposed to see the light of day.
mahatmakanejeeves
(57,656 posts)All the big players in the industry know who all the other big players are. Then, from out of nowhere, a couple of guys with a pickup truck and a ladder show up and get awarded this yuuuge contract. At the least the ladder is fiberglass, and not aluminum.
Igel
(35,362 posts)I included the info in https://www.democraticunderground.com/10141890476#post4 .
There was nothing especially shady about it except the facts. Nobody had spun it. The real issue at the time was that PR was in charge of the power lines and taking steps, good or bad, as a local government should. It was ignored for that very reason. If PR is responsible, and things are screwed up, we get to assign responsibility to those responsible. Not very satisfying, blaming a Trump foe.
It pays to note that PR's problem isn't a bunch of lines down that just run across the street. Substations and pretty large transformers were trashed. The Brazil tie, to a large company specializing in transformers, makes sense, if Whitefish's purpose is rebuilding the transmission lines. The lack of 5000 employees also makes sense.
And having the transmission lines put back in place first also makes sense. You typically check the local network by turning it on and tracking where faults are. Until the high-tension lines are in place, you fix some lines but you can't really do much about getting power to people.
It pays to remember that the media have a long history of finding tempests in teacups very profitable and useful.
JI7
(89,276 posts)irisblue
(33,036 posts)Do not the government lawyers look at contracts before they are signed?
An attorney looked over my house contract before I signed it, and it was for way way less money.
Igel
(35,362 posts)PR is fairly autonomous. It signed a contract. I'd assume that PR-government lawyers looked at it.
Then again, this was before Oct. 6, so the contract was signed just a bit more than 2 weeks after Maria made landfall. The usual safeguards--if there are any--may have been ignored in the rush to what needed to be done. ("It needs to be done" is a frequent excuse for doing things wildly illegal.)
irisblue
(33,036 posts)Or the terrorital equivalent. Is not there an individusl in the legal department of the terrority that looks over contracts?
mahatmakanejeeves
(57,656 posts)This Twitter feed, as are many others, is following the story:
https://twitter.com/kenklippenstein
US Congressman demands Oversight Committee investigation into Whitefish contract, warning of "sweetheart contracts and backroom deals"
Link to tweet
mahatmakanejeeves
(57,656 posts)benld74
(9,911 posts)Nobody, person or company can AUDIT expenses or costs associated with the contract
SergeStorms
(19,204 posts)that this was done under President Hillary Clinton's administration. (it never would happen under her administration, but try to imagine it)
Now imagine what the GOP's reaction would be.
mahatmakanejeeves
(57,656 posts)Hat tip, Wwcd: Not sure if this will help you, FEMA Website on PREPA
Release date: October 27, 2017
The decision to award a contract to Whitefish Energy was made exclusively by PREPA. FEMA was not involved in the selection. Questions regarding the awarding of the contract should be directed to PREPA.
Any language in any contract between PREPA and Whitefish that states FEMA approved that contract is inaccurate.
FEMA has not provided any reimbursement to Puerto Rico to date for the PREPA contract with Whitefish Energy. Regardless, FEMA will verify that the applicant (in this case PREPA) has, in fact, followed applicable regulations to ensure that federal money is properly spent.
Based on initial review and information from PREPA, FEMA has significant concerns with how PREPA procured this contract and has not confirmed whether the contract prices are reasonable. FEMA is presently engaged with PREPA and its legal counsel to obtain information about the contract and contracting process, including how the contract was procured and how PREPA determined the contract prices were reasonable.
It is important for all applicants for FEMA Public Assistance to understand and abide by federal requirements for grantee procurement. Applicants who fail to abide by these requirements risk not being reimbursed by FEMA for their disaster costs.
FEMA continues to focus on the expedited restoration of essential services in support of the Governors recovery goals.
BlueJac
(7,838 posts)he walks and everyone else get screwed!
roomtomove
(217 posts)received a big check from these guys...I recalled he was complimentary of
Trumpolini's PR response.
underpants
(182,935 posts)No doubt
Tom Rinaldo
(22,917 posts)"Talk to these, ahem, contractors in Montana."
EX500rider
(10,874 posts)The contract states that "Prepa hereby represents and warrants that Fema has reviewed and approved of this Contract".
It also says Fema "confirmed this Contract is in an acceptable form to qualify for funding from Fema or other US Governmental agencies".
But in an email to reporters on Thursday night, Fema denied that.
It said "any language in any contract between Prepa and Whitefish that states Fema approved that contract is inaccurate".
Fema also said it "has significant concerns with how Prepa procured this contract and has not confirmed whether the contract prices are reasonable"
http://www.bbc.com/news/world-us-canada-41780916
Some of the reasons could be that the other company that bid wanted 25 million up front and Prepa (the PR utility company)
does not have the cash, they filed for bankruptcy recently.