April 13, 2021

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Office of the Inspector General identifies deficiencies in the DNER contract


The referral for the evaluation of the contract that was formalized in 2019, arises from the current Secretary of the DNER

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San Juan – The Office of the Inspector General of Puerto Rico (OIG), in its role of prevention and supervision, carried out an examination in the Department of Natural and Environmental Resources (DNER) on a contract awarded, in which it identified and validated deficiencies that threaten against public funds and sound administration.

The referral for the evaluation of the contract that was formalized in 2019, arises from the current Secretary of the DNER, who upon his arrival at the agency, determined to consult concerns about the content and clauses established in it.

The contract was agreed for the amount of $ 1 dollar, annually and a term of 5 years.

However, despite the fact that it is established that said contract will be for $ 1 dollar, the company will receive a profit representing the amount of the convenience charges for all procedures or transactions that involve some type of cost, charge, fee, right or tariff by the DNER.

The purpose established according to the wording of the contract is to facilitate the establishment of an electronic system for the submission of applications and permits and renewals and the integration to the Puerto Rico Government Services Platform.

A convenience charge will be charged simultaneously with the charge for any item mentioned above and is attributable to anyone who requires the service.

The DNER did not carry out a feasibility study that could determine the projection of stamp sales or procedures requested by citizens, for which there is no estimate of the income that the private contractor would receive as part of the convenience charges that would be charged to people, when implementing the new system.

Nor is it evidence that the DNER evaluated the possibility of paying a fixed amount to the contractor for the implementation of the contract and maintenance charges and that the income received became part of the treasury.

On the other hand, the contract provides a clause for a penalty up to $ 50,000 per month, in favor of the contractor in a single payment if the contract is canceled before its expiration date and if the Department makes a judicial challenge, the compensation or penalty will increase to a liquid sum equivalent to $ 75,000 per month.

Said clause results in a highly costly one for the DNER.

From the analysis carried out, other deficiencies could be found such as, the formalization of a contract that did not have the certifications required by law; lack of analysis on the cost and feasibility studies of the contracting carried out and onerous and harmful clauses for the DNER and the Government of Puerto Rico.

These clauses could have the effect of unilaterally favoring a contractor against the best interests of the Government.

The private interests of a contractor, under no circumstances, should prevail or in any way affect the fundamental duty to assure citizens that their public funds are being used to provide a quality service, at the lowest possible cost.

The deficiencies found in the evaluated contract could be in contravention of the regulations and the public policy of sound administration and government contracting, for which the OIG instructed the DNER not to proceed with its implementation until all the deficiencies indicated are remedied. and conduct a feasibility study alongside the Puerto Rico Innovation and Technology Service (PRITS), in accordance with Act No. 75-2019.

The examination report is available on the OIG website www.oig.pr.gov.

The OIG validates the management of the Secretary of the DNER, in referring the matter in order to promote a healthy public administration.

With this, they emphasize the importance that any person or public employee who identifies irregularities in the agencies of the executive branch can make the corresponding referrals to the OIG.

For this you can communicate at 787-679-7979 or through the mail [email protected].



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