The head of the Federal Emergency Management Agency testified Tuesday that his agency didn’t know about a $300 million no-bid contract to rebuild Puerto Rico’s electrical grid until after it was awarded, and likely wouldn’t have approved it.
“We were notified several weeks after the fact” that Puerto Rico’s power authority had an agreement with Whitefish Energy Holdings LLC, FEMA administrator Brock Long told members of the Senate Committee on Homeland Security & Governmental Affairs Tuesday. “There’s no lawyer inside FEMA that would have ever agreed to the language that was in that contract.”
Among other things, the contract included a provision that precluded an audit of the work that was done.
The contract was awarded by the Puerto Rico Electric Power Authority without competitive bidding to Whitefish, a Montana company with two employees and little experience with federal contracting. Puerto Rico officials canceled the contract Sunday amid criticism.
Whitefish is based in the hometown of Interior Secretary Ryan Zinke, whose son worked for the company. Zinke says he played no role in the selection of Whitefish. Among Whitefish’s financial backers are major donors to President Donald Trump.
The inspector general responsible for FEMA has sharply criticized the agency’s oversight of grants, warning the committee in a June letter about FEMA’s “continued failure to manage disaster relief funds adequately.” Wisconsin Senator Ron Johnson, who chairs the committee, said at the beginning of Tuesday’s hearing that he was drafting legislation to address the concerns in that letter.
Long acknowledged that his agency still needs to improve its oversight, but distanced himself from Whitefish.
“We have a lot of work to do when it comes to training and ensuring the grant monitoring,” Long said. “But in that case, that was not our contract.”
Whitefish was selected Oct. 19 by Prepa to lead the rebuilding of the grid, with the expectation that the money would come from FEMA. The agency is reviewing the contract, as is the inspector general of FEMA’s parent agency, the Department of Homeland Security.
The company, in a statement Sunday, said the cancellation will delay rebuilding of the power grid and said it stood by its work, particularly in remote areas accessible only by helicopter and heavy equipment. About 500,000 residents in San Juan will soon have power back because of Whitefish’s work, it said.
“The original decision by PREPA to have Whitefish Energy come to the 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 in the statement.
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