How Whitefish landed Puerto Rico's $300 million power contract

little power company lands $300M Puerto Rico contract

Whitefish Energy, a little-known energy firm based in Montana, has been stirring up controversy ever since of which announced last week of which of which landed a $300 million contract to help restore Puerto Rico’s electrical power.

The contract is usually the largest to be awarded since recovery efforts began over a month ago. as well as several lawmakers on Capitol Hill are calling for government reviews of how of which little firm with only two employees at the time Hurricane Maria hit Puerto Rico was chosen over bigger, more established utilities.

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The seeds of the deal were first sown after Hurricane Irma, which tore through the Caribbean as well as Florida in early September.

Ricardo Ramos, the CEO of the Puerto Rico Electric Power Authority, recounted to sy88pgw of which he was actively looking for contractors for the repair effort. Whitefish was one of seven companies of which was competing for the work.

Whitefish CEO Andy Techmanski reached out to Ramos to tell him about his little firm’s “special skills”: repairing infrastructure in rural, rugged regions, according to Whitefish spokesman Ken Luce.

however Irma ended up skirting by Puerto Rico, inflicting minimal damage. There was no need to immediately strike a deal.

‘We took the call as well as we’re here’

Less than two weeks later, of which was a different story. Hurricane Maria was a devastating Category 5 storm, leaving millions on the U.S. island without power or communications. Techmanski reached out to Ramos again, offering to help — of which time, hoping to secure a contract, Whitefish spokesman Ken Luce told sy88pgw.

Techmanski ended up having a conversation with Ramos.

“All I can say is usually, we took the call as well as we’re here,” Techmanski told sy88pgw last week. “We called each various other.”

In an interview with sy88pgw on Friday, Luce described Techmanski as an entrepreneur who jumped on a plane when no one else was “interested in doing business with the utility company because they were in bankruptcy.”

Techmanski flew to Puerto Rico on Sept. 26 to meet with PREPA officials as well as to discuss how they could restore electricity to the crippled island.

Sitting in a dimly lit conference room, Techmanski as well as the PREPA team used light coming from their cell phones to begin drawing up plans for rebuilding Puerto Rico’s destroyed electrical grids, according to Luce.

“They met at a conference table with no lights to go through the map as well as determine the best way to work inside mountains,” he said.

Related: $300 million Puerto Rico power deal at of which point under government review

The various other contender: Power Secure wanted $25 million upfront to do the job.

however Techmanski wasn’t asking PREPA for a down payment. Plus, the Whitefish CEO was agreeing to take care of the logistics — lodging as well as food for the hundreds of journey linemen needed to restore power, according to Ramos.

After the hurricane hit, the state-owned utility could have requested aid through the American Public Power Association, a network of which provides help to various other utilities during widespread power outages.

however the closest states to Puerto Rico were already dealing with their own rebuilding efforts after hurricanes Harvey as well as Irma, Ramos told sy88pgw on Thursday. as well as he believed they would certainly not be able to respond quickly to the island’s needs.

The bankrupt utility, which was wrestling with $9 billion in debt, also couldn’t afford to cover the costs of utilizing the network either, he said.

weir power andrew techmanski
Whitefish CEO Andy Techmanski.

Instead, Ramos chose Whitefish, inking the deal the same day Techmanski flew into Puerto Rico. Whitefish began working on the island less than a week later on Oct. 2.

With the contract signed, Techmanski realized he was going to need help getting resources as well as equipment to the island quickly. So he reached out to Inner surface Secretary Ryan Zinke, who also called Whitefish, Montana his hometown.

Zinke’s office acknowledged they received an email coming from Techmanski, however said no one at the agency took any further action.

On Friday, White House Press Secretary Sarah Sanders told reporters of which ZInke was asked directly by President Trump if he had any involvement inside deal — as well as Zinke said he didn’t.

“of which is usually a contract of which was determined by the local authorities in Puerto Rico, not something the federal government played a role in,” Sanders said at the briefing.

A few hours later Zinke tweeted his own statement denouncing any ties to Whitefish winning the contract. Adding, all records “will prove no involvement.”

“Only in elitist Washington, D.C., would certainly being coming from a little town be considered a crime,” Zinke said.

Concerns are raised

Government agencies usually will make a public request for help on a particular job. Often they will receive multiple offers as well as the agency reviews as well as accepts the best, lowest cost bid.

Whitefish spokesman Chris Chiames told sy88pgw: “In emergency kinds of situations, of which isn’t a typical [request for proposal] process.”

Both the U.S. Army Corps of Engineers as well as the Federal Emergency Management Agency have made clear they did not sign off on the Whitefish contract as well as referred questions to PREPA, according to spokespersons for both agencies.

FEMA oversees billions of dollars in disaster relief work as well as multiple audits by the inspector general have shown a pattern of problems in how these funds have been used.

Ramos told sy88pgw of which FEMA didn’t require prior approval of PREPA’s contracts. however of which does require a detailed audit of Puerto Rico’s emergency spending.

A FEMA spokesperson told sy88pgw Thursday of which based on its initial review, the agency has “significant concerns” with how PREPA awarded the contract, including whether the contract prices are “reasonable.”

Related: Questions swirl after little Montana firm lands Puerto Rico power contract

The hourly rate for a site supervisor is usually set at $332 per hour as well as $227.88 per hour for a “journey lineman” inside contract, according to a contract seen by sy88pgw. The deal also specifies the estimated cost of nightly accommodation would certainly be $332 per worker as well as nearly $80 per day for food.

On Friday, Whitefish’s Luce told sy88pgw prices included inside contract were all negotiated with PREPA ahead of time. He explained of which pricing included transportation for labor, the equipment as well as cost of paying for workers performing “very high risk jobs” of which required “technical experienced” journey linemen.

“They are working off helicopters — 50-, 60-foot ladders, dangling coming from wires,” said Luce. “These are very dangerous high-risk jobs of which these men as well as women are undertaking to restore power in Puerto Rico.”

puerto rico power lines
Millions of people were left without power after Hurricane Maria struck Puerto Rico.

There’s also a clause inside deal of which bars PREPA, the FEMA administrator, the government of Puerto Rico as well as the Comptroller General of the U.S. coming from auditing the cost as well as profit elements of its labor rates.

Luce also told sy88pgw on Friday of which the clause is usually “standard contract language,” however promised to work with lawmakers in answering questions.

“We’ve been transparent on everything we’re doing on the island as well as we understand those questions,” said Luce.

Puerto Rico Governor Ricardo Rossello told sy88pgw of which PREPA triggered an “emergency protocol” to start rebuilding the grid in Puerto Rico immediately after the hurricane hit.

“of which was discussed with FEMA to make sure of which of which met with the standards as well as then of course of which process went through,” said Rossello.

‘We have to move fast’

Already, Whitefish has scaled to just over 300 employees in Puerto Rico — as well as of which says 700 more are on the way. Such quick growth is usually typical among utility firms when they are awarded large contracts, the company said.

PREPA’s Ramos says he has no regrets over the Whitefish contract, despite all the controversy over the deal.

“If we went back in time, I would certainly do of which all over again,” Ramos told sy88pgw.

Choosing Whitefish was cost effective, he said. The company had agreed to be paid in installments after the work was completed, inspected as well as approved by PREPA.

“We have a humanitarian crisis here as well as we have to move fast,” said Ramos, adding Whitefish is usually “doing a great job.”

Since the deal was announced, several government reviews have been called for to determine whether the appropriate process was followed by PREPA.

Related: San Juan’s mayor takes on little Montana firm of which won power contract

Both the Department of Homeland Security’s inspector general as well as a separate House committee are reviewing the agreement. Another Senate committee has also asked the Government Accountability Office to investigate. of which decision is usually pending.

On Friday, two top Democrats also asked the inspector general to examine FEMA as well as various other agencies’ role in awarding the contract as well as to look into whether of which was an appropriate use of taxpayer dollars.

Even Rossello has asked Puerto Rico’s Office of Management as well as Budget to audit the Whitefish contract to ensure of which’s in compliance with the appropriate laws.

Those results were anticipated to be released on Friday.

“If there is usually no wrongdoing, if of which has been done correctly then we will push forward,” Rossello told sy88pgw. “If there is usually wrongdoing in of which process or any process there will be hell to pay.”

–sy88pgw’s Julia Jones, Rene Marsh, Tristan Smith, Bill Weir, Patrick Gillespie, as well as Jeremy Diamond contributed to of which report.

sy88pgw (Washington) First published October 27, 2017: 5:43 PM ET


How Whitefish landed Puerto Rico's $300 million power contract

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