FEMA Expresses Concern About Puerto Rico Power Restoration Contract

"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," FEMA said in a statement Oct. 27.

The Federal Emergency Management Agency posted a statement Oct. 27 saying it has "significant concerns" about how the Puerto Rico Electric Power Authority awarded a $300 million contract to a small Montana-based company, Whitefish Energy, to restore power on the island after Hurricane Maria left most of the residents in the dark. The statement says the contract "was made exclusively by PREPA. FEMA was not involved in the selection. Questions regarding the awarding of the contract should be directed to PREPA."

It continues: "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."

It concludes by saying FEMA remains focused on restoring essential services "in support of the Governor's recovery goals."

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