That $300 million no-bid contract for Puerto Rico forbids any government audit or review
By Mark Sumner Friday Oct 27, 2017 · 7:57 AM CST
Whitefish Energy, the two-person, office-free company that landed a $300 million contract to repair the 2,400 miles of Puerto Rico’s electric lines, got more than just a big check, they got a very nice clause in their contract. A leaked copy of the contract [ http://www.documentcloud.org/documents/4113619-Whitefish-Contract-Signed-10-17-Copy.html#document/p1 ] ( "Not Found' ) includes a section on just who has access to the records kept by Whitefish in carrying out the work. That list includes:
PREPA, The Commonwealth of Puerto Rico, the FEMA Administrator, the comptroller general of the United States, or any of their authorized agents …
Which seems like a reasonable enough list. Except that tucked in a couple of sentences below is something that unwinds most of that authority:
In no event shall PREPA, the Commonwealth of Puerto Rico, the FEMA Administrator, the comprtoller general of the United States, or any of their authorized representatives have the right to audit or review the cost and profit elements of the labor rates specified herein.
Since Whitefish doesn’t exist as a physical company, everything it’s doing is in the form of billing for subcontractors at rates that often exceeds $400 an hour along with daily charges for food and lodging. The contract makes those rates beyond review.
That clause makes it impossible for anyone to tell how much Whitefish is actually paying its workers and how much it is pocketing. It makes almost every line item under the contract proof against review.
There are a few items of the contract that can be seen.
Actually, those per diem rates for food and lodging are only what Whitefish bills. What they actually spend on their workers isn’t clear.
Which the crux of the matter. Whitefish has nothing, so their expenses are primarily in the form of paying workers they send to Puerto Rico. By hiding what they actually pay those workers, the profit Whitefish makes from the contract becomes invisible.
It’s worth noting that the contract includes standard language about equal opportunity and union representation. However, there’s scant evidence that Whitefish is following any of these rules, since their entire operation seems to consist of a couple of telephones in Montana.
WASHINGTON — Members of Congress from both parties on Tuesday called for an investigation into a $300 million contract awarded to a small company based in Interior Secretary Ryan Zinke’s hometown of Whitefish, Montana.
AI
