April 16, 2021

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AEE takes the hands of failures with Whitefish and Cobra | government

The Electric Power Authority (PREPA) distanced itself from the flaws indicated in a report by the Office of the Inspector General (OIG) of the Department of Homeland Security (DSN) regarding the supervision and contracting of the Whitefish Energy companies and Cobra Acquisitions for the recovery of the electrical system in 2017.

The document also reveals that the public corporation overpaid the contracts to said companies in the amount of $ 2 billion and that they did not comply with federal cost principles. Failures in supervision, according to the document, are not only attributed to PREPA but also to the Federal Emergency Management Agency (FEMA).

PREPA's director of finance, Nelson Morales Rivera, told EL VOCERO that the report dated July 27 "is addressed as such to FEMA." "They have government oversight, and the government is the one who forwards the funds if they are repayable to the authority. The report has to do with the process of hiring Whitefish and Cobra by the authority and the letter is from the supervision of FEMA on the process followed by the authority. The Office of the Inspector General conducted an audit, but the findings and recommendations are directed to FEMA, "he said.

He said that the public corporation is" evaluating "the report, the findings and the recommendations for internal discussion. "We have not yet received a communication from FEMA regarding the next steps. So we do not want to speculate what the impact would be to the authority. We would be discussing that with FEMA in the coming weeks," he said.

That report alleging that these contracts did not meet federal requirements was, at some point, considered by PREPA ?, asked this newspaper.

"Those are the conclusions of the OIG. We do not want and we are evaluating the findings. We are doing it with the collaboration of experts in the field of FEMA that we have contracted to see what the next steps would be. Even FEMA has not communicated with the authority, "Morales Rivera replied.

The official repeated repeatedly that the OIG report was addressed to FEMA, but not PREPA.

But how is it possible that a contract is awarded through FEMA that affects PREPA and then cannot respond to it is What does the OEG allege ?, insisted EL VOCERO .

"Yes, we are evaluating the findings because we are in contracts with Whitefish and Cobra, but the report is directed to FEMA and we are evaluating the findings. We do not want to speculate because it would not be appropriate for us to say what the results of the evaluation of the findings and the consultation with FEMA would be, "replied the executive.

Morales Rivera also did not want to procedurally explain what would follow after the evaluation that the PREPA on the report. "We cannot speculate, but we would be evaluating the next steps in conversations with FEMA," he insisted.

In detail the contracts

Part of what the OIG report indicates is that failures in the contracting and oversight process may result in the public corporation not being entitled to a full refund through FEMA's Public Assistance Program (AP).

Refunds owed by FEMA to PREPA for both contracts total $ 389 million, according to a document provided by the corporation to EL VOCERO.

It details that PREPA never received a refund FEMA contacted Whitefish, the company that billed $ 143.3 million to the public corporation. According to Morales Rivera, PREPA issued a payment of $ 36.9 million and $ 106.4 million remain pending.

However, the figure provided in said document dated July 10 does not match the $ 300 million that had been said to be the amount for the contract to Whitefish.

On the other hand, Cobra Acquisitions billed PREPA $ 1,293 million, of which $ 1,094 million has been paid. However, PREPA still owes $ 198.9 million to that company. For the purposes of this contract, PREPA has received a reimbursement of $ 904 million.

Both contracts were controversial during the emergency caused by Hurricane Maria. The first mess was with Whitefish whose contract was canceled after it emerged that the company only had two employees, did not have the necessary equipment to carry out the work, and that the normal auction process was not followed.

Then, the contract with Cobra that resulted in the arrest of Ahsha Tribble, former FEMA Deputy Regional Administrator; Donald Keith Ellison, former president of the Cobra Acquisition and Jovanda R. Patterson, former FEMA deputy chief of staff, for fraud in funds for the recovery of the electrical system.

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