Puerto Rico’s $300-million contract with Whitefish Energy is under investigation

[Zippyjuan]

https://qz.com/1113800/whitefish-energys-300-million-contract-with-puerto-rico-raises-significant-concerns-with-fema-congress/

Two year old company which only had two employees when the hurricane struck Puerto Rico. Happens to be in the same small town as Interior Secretary Ryan Zinke grew up in and his son once worked for the owner one summer. Contract was awarded without a competitive bidding process.


The Federal Emergency Management Agency (FEMA) and two Congressional committees are all investigating a $300-million contract to rebuild Puerto Rico’s energy grid after hurricane damage. The text of the contract between Puerto Rico’s energy authority and Whitefish Energy Holdings was first made public by local publication Caribbean Business, sparking questions and a disavowal from FEMA.

Here’s why the US government might be concerned:

Little experience

Before winning the Puerto Rico contract, Whitefish had just two employees, and little relevant experience, as the Washington Post reported. That experience included a $500,000 electricity line repair in Washington state, chief executive Andrew Techmanski told Caribbean Business, a local business publication.
Close administration ties

Whitefish is backed by private equity company HBC Investments, a donor to the Trump presidential campaign, and to a PAC that supported Trump’s energy secretary Rick Perry. It is also based in the Montana town of the same name, which happens to be the hometown of White House cabinet secretary Ryan Zinke.

Unusual terms

A copy of the $300 million contract made public by Caribbean Business includes some eyebrow-raising terms. (The copy was pulled from the internet Friday morning, but parts of it are still circulating on social media). Whitefish’s spokesman didn’t respond to questions about the contract.

No audit of Whitefish’s cost and profit from the project

A clause that says “In no event shall” the Puerto Rico Power Authority, (PREPA), the US or Puerto Rico government, or FEMA “have the right to audit or review the cost and profit elements of the labor rates specified herein.” (pg. 27)

A pledge that FEMA denies

The document states that “by executing this contract, PREPA hereby represents and warrants that FEMA has reviewed and approved of this contract, and confirmed that this contract is in an acceptable form to qualify for funding from FEMA or other US governmental agencies,” (pg. 30)

Significant expenses

Accommodation costs of $331.42 per person, per day, and food costs of $79.82 per person, per day. Flights to and from Puerto Rico estimated at $1,000 per person, each way.


In a statement, FEMA said that “any language in any contract between PREPA and Whitefish that states that FEMA approved that contract is inaccurate,” and that it has “significant concerns” with how PREPA procured the contract. FEMA reimburses local governments and businesses after natural disasters but has strict rules about who it will pay back and how much money it will pay, so that taxpayer money is well spent.

[Zippyjuan]

https://www.theguardian.com/world/2017/oct/27/fema-says-it-did-not-approve-300m-puerto-rico-power-grid-contract


White House says it had no role in $300m Puerto Rico power contract


Trump administration says it had no involvement in the decision to hire a tiny Montana company, which is based in interior secretary Ryan Zinke’s hometown


The Trump administration has said that it did not have any role in the decision to award a $300m contract to help restore Puerto Rico’s power grid to a tiny Montana company in interior secretary Ryan Zinke’s hometown.

During a press breifing on Friday afternoon, White House press secretary Sarah Huckabee Sanders repeatedly denied that the federal government had any role in granting the contract to Whitefish Energy.

“The federal government, as I said, has nothing to do with the contract or the process,” Sanders said. “This was something solely determined by the Puerto Rican government.”

She refused to comment on whether the choice of a two-year-old company raised questions and said the administration “looks forward” to the results of an audit of the deal.

Huckabee Sanders said Donald Trump had asked Zinke about the contract and that the cabinet secretary said he had nothing to do with it.

“He had no role in that contract,” Sanders said of Zinke. “This was a state and local decision made by the Puerto Rican authorities and not the federal government.”

Earlier on Friday the Department of Homeland Security’s inspector general, an agency watchdog, confirmed that federal auditors will review the Whitefish contract.

“As part of their standard procedure, they will conduct vetting to look for the presence of any inappropriate relationships,” said Arlen Morales, a spokeswoman for the inspector general’s office.

The Federal Emergency Management Agency also distanced itself from the deal. Fema said in a statement that any language in the controversial contract saying the agency approved of the deal with Whitefish Energy Holdings is inaccurate. The contract, which was awarded by the Puerto Rico Electric Power Authority, said the utility would not pay costs unallowable under Fema grants, but it also said, “The federal government is not a party to this contract.”

Fema said it has not approved any reimbursement requests from the utility for money to cover repairs to the island’s power grid following Hurricane Maria.

The agency said its initial review raised significant concerns about how Whitefish got the deal and whether the contracted prices were reasonable. The two-year-old company had just two full-time employees when the storm hit on 20 September. It has since hired more than 300 workers.

The interior department has denied that Zinke, a former Montana congressman, played any role in the contract award. Zinke knows Whitefish CEO Andy Techmanski “because they both live in a small town where everyone knows everyone”, a spokeswoman said. Zinke’s son had a summer job at a Whitefish construction site.

[Zippyjuan]

https://www.vanityfair.com/news/2017/10/ryan-zinke-neighbor-puerto-rico-power-contract

For those who think we need more high paying jobs- may want to apply here. $300 an hour wages, $300 a day housing allotment, $80 a day for food.


According to the contract, the hourly rate for a site supervisor is $330 while that of a “journey lineman” is $227.88. Subcontractors, who make up the bulk of the company’s workforce, cost $462 per hour for a supervisor and $310.04 for a lineman. Nightly accommodations are $332 per worker, and food is nearly $80 a day. The Post notes that only eight contracts over $20 million have been approved for Puerto Rico by FEMA and the Army Corps of Engineers, and half of those have been for shipments of food and bottled water.


The scale of the disaster in Puerto Rico is far larger than anything Whitefish has handled. The company has won two contracts from the Energy Department, including $172,000 to replace a metal pole structure and splice in three miles of new conductor and overhead ground wire in Arizona. Shortly before Maria ravaged Puerto Rico, Whitefish landed its largest federal contract, a $1.3 million deal to replace and upgrade parts of a 4.8-mile transmission line in Arizona. The company—which was listed in procurement documents as having annual revenue of $1 million—was given 11 months to complete the work, records show. Puerto Rico has 2,400 miles of transmission lines across the island, and 30,000 miles of distribution lines with 300 substations.

[Jamesiv1]

More shenanigans from the anti-Trump, Clinton-loving Governor of Puerto Rico.

I don't see anything that suggests Trump or his administration had anything to do with selecting a company with 2 employees lol

[phill4paul]

PREPA


The Puerto Rico Electric Power Authority (PREPA) —Spanish: Autoridad de Energía Eléctrica (AEE)— is an electric power company and the government-owned corporation of Puerto Rico responsible for electricity generation, power distribution, and power transmission on the island.[1] PREPA is the only entity authorized to conduct such business in Puerto Rico, making it a government monopoly. The authority is ruled by a board of directors appointed by the governor with the advice and consent of the Senate. Since 2014, PREPA is subject to the Puerto Rico Energy Commission, another government agency whose board of directors is also appointed by the governor.

https://en.wikipedia.org/wiki/Puerto_Rico_Electric_Power_Authority

[Zippyjuan]

http://www.latimes.com/politics/washington/la-na-pol-essential-washington-updates-puerto-rico-governor-seeks-to-cancel-1509290481-htmlstory.html


Puerto Rico says it's scrapping $300-million Whitefish contract amid increased scrutiny


The head of Puerto Rico's power company said Sunday the agency will cancel its $300-million contract with Whitefish Energy Holdings amid increased scrutiny of the tiny Montana company's role in restoring the island's power system following Hurricane Maria.

The announcement by Ricardo Ramos came hours after Gov. Ricardo Rossello urged the company to scrap the deal.

Ramos said that Whitefish will continue with current work, but the contract would then be scrapped — leading to delay of 10 to 12 weeks in completing the work.

It's an enormous distraction,” he said on why he canceled the contract. “This was negatively impacting the work we're already doing.”

Federal investigators have been trying to investigate the contract awarded to the small company from Interior Secretary Ryan Zinke's hometown. The deal, signed shortly before the hurricane hit, is being audited at the local and federal level.

Whitefish spokesman Chris Chiames told the Associated Press before the Ramos announcement that the company would soon issue a comment.

Rossello said earlier that nearly $8 million has been paid to Whitefish so far.

Rossello said he has requested that crews from New York and Florida come help restore power in Puerto Rico as he criticized the U.S. Army Corps of Engineers for not meeting its goals. The agency could not be immediately reached for comment.

The governor also announced the appointment of an outside coordinator to oversee the power company's purchase and contracting division.

“If something illegal was done, once again, the officials involved in that process will feel the full weight of the law, and I will take administrative actions,” Rossello said.

Roughly 70% of the island remains without power more than a month after Hurricane Maria struck the U.S. territory on Sept. 20 as a Category 4 storm with winds of up to 154 mph.

Ramos has said that Puerto Rico's Electric Power Authority reached a deal with Whitefish just days before the hurricane struck, saying that he spoke with at least five other companies that demanded similar rates, in addition to a down payment the agency did not have.

Ramos also has said the Federal Emergency Management Agency had approved of the deal, something the agency has denied.

FEMA said it has not approved any reimbursement requests from the power company for money to cover repairs to the island's electrical system. The contract said the utility would not pay costs unallowable under FEMA grants, but it also said, “The federal government is not a party to this contract.”

FEMA has raised concerns about how Whitefish got the deal and whether the contracted prices were reasonable. The 2-year-old company had just two full-time employees when the storm hit, but it has since hired more than 300 workers.

A Whitefish contract obtained by the Associated Press found that the deal included $20,277 an hour for a heavy lift Chinook helicopter, $650 an hour for a large crane truck, $322 an hour for a foreman of a power line crew, $319 an hour for a journeyman lineman and $286 an hour for a mechanic. Each worker also gets a daily allowance of $80 for food, $332 for a hotel room and $1,000 for each flight to or from the mainland.

[phill4paul]

http://www.latimes.com/politics/washington/la-na-pol-essential-washington-updates-puerto-rico-governor-seeks-to-cancel-1509290481-htmlstory.html


saying that he spoke with at least five other companies that demanded similar rates,


A Whitefish contract obtained by the Associated Press found that the deal included $20,277 an hour for a heavy lift Chinook helicopter, $650 an hour for a large crane truck, $322 an hour for a foreman of a power line crew, $319 an hour for a journeyman lineman and $286 an hour for a mechanic. Each worker also gets a daily allowance of $80 for food, $332 for a hotel room and $1,000 for each flight to or from the mainland.

What are my odds if I bet they were all Union companies?

[Zippyjuan]

What are my odds if I bet they were all Union companies?

They only had two employees when they applied for the job. Doubt they had a union. https://govtribe.com/vendor/whitefish-energy-holdings-llc-whitefish-mt

But the figures are ridiculous even for union work.

[phill4paul]

They only had two employees when they applied for the job. Doubt they had a union. https://govtribe.com/vendor/whitefish-energy-holdings-llc-whitefish-mt

But the figures are ridiculous even for union work.

But they hired 300 workers. Linemen...journey lineman. Are there any electrical linemen that aren't Union anymore? Honestly, getting power up to 30% in a months time after total devastation isn't too bad. There are some people with power out here in N.C. after tornadoes a week ago and a more solid infrastructure.