Original Whitefish deal with PREPA had lower rates
The controversial contract between the Puerto Rico Electric Power Authority (PREPA) and Whitefish Energy Holdings, which has raised red flags both in Congress and the federal government threatening the Commonwealth's credibility at a critical moment when it is yet to be decided how many federal resources should be assigned for recovery, is actually an amended version from an original agreement.
In contrast to the final $300 million contract, the original agreement had lower rates and did not contain contractual dispositions that barred local and federal agencies to audit it.
NotiCel had access to the original document, signed the 26th of September by Ramón Caldas Pagán, chief of PREPA's Supply Division. Caldas Pagán is identified within the agreement as the utilities contracting officer.
Two days before the contract was approved, governor Ricardo Rosselló lifted regular acquisition procedures for contracts. The amended version of the contract was signed by PREPA CEO, Ricardo Ramos, the 17th of October.
However, Whitefish has said that they arrived with their crews the 2nd of October to begin work on the devastated electrical system, 15 days before the revised version of the agreement was approved.
The contract also identifies PREPA's director of Distribution and Transmission, Edgardo Rivera, as the employee that was supposed to receive and pass judgement over the work schedule that Whitefish was supposed to turn in. Said document had to assure the work Whitefish had to do could be done within the terms of the contract, which is 12 months.
Andy Techmanski, owner of Whitefish, signed both contracts.
One fact that stands out from the original contract, which is clearly specified on its third article, is that the cost of the agreement will be subject to future amendments. In that document there are no mentions to total cost or mobilization costs.
The amended contract set the total cost of the contract at $300,000,000 and the cost of mobilization at $3,700,000.
In terms of rates, the original contract also displays a series of considerably lower rates to those that were agreed upon by PREPA and Whitefish in the final agreement, although it does contain caveats that increase the pay per hour after the first work day, and for work done during Sundays and Holidays.
According to the original contracts rates, a general foreman would get paid $134.53 an hour for the first 8 hours of work. After that he would get paid $192.19 per hour for up to 10 hours worked daily from Monday to Saturday, and $240,24 per hour for working Sundays, holidays, or Overtime.
In the amended contract, a general foreman has a rate of $240.24 per hour without conditions.
A line foreman would get paid $129.73 per hour for the first 8 hours of work. Afterwards he gets paid $185.33 per hour for up to 10 hours worked daily Monday to Saturday, and $230.63 per hour for working on Sunday, holidays or Overtime.
In the amended contract, a foreman gets paid $230.63 per hour.
A groundman would get paid $91.29 per hour for the first 8 hours of work. Afterwards its $130.42 per hour for up to 10 hours worked daily Monday to Saturday, and $188.07 per hour for work done on Sunday, holidays, or Overtime.
In the amended contract this position gets paid $188.07 per hour.
The rate schedule also includes costs for use of equipment, but contrary to the amended agreement there are no rates for lodging, food per person, fuel nor air fare for flights each way.
Likewise, the original contract does not contain any clause that bars PREPA, the local government, the FEMA administrator or the comptroller general of the United States from auditing or revising the rates that were agreed upon. Such a clause was included in the amended contract, approved the 17th of October.
Upon discussing this problematic disposition with The Wall Street Journal, Ramos said, 'there is no other explanation for that other than 'oops''. 'There was a lot of pressure to sign that deal immediately, not from Whitefish, but from me', he added.
Conversations with Whitefish began post Irma
The first encounter between PREPA and Whitefish happened early in September, a few days after hurricane Irma skimmed Puerto Rico's northeast coast. Ramos told CNN that Whitefish was one of seven companies competing for the contract to aid PREPA's efforts in restoring power.
Techmanski reached out to Ramos to give him details about his firm, but because Irma's impact was minimal, his services were not required. Maria, however, has different case.
After hurricane Maria passed through the island, Techmanski managed to communicate with Ramos to offer his services and acquire a contract. Techamsnki told CNN that they both reached out each other. On September 26, the owner of Whitefish flew to Puerto Rico and met with the PREPA CEO to discuss his proposal to restore the electrical system.
According to CNN, the decision to choose Whitefish for the job was done because another company they were in talks with, Power Secure, was asking for a $25,000,000 deposit, something that Techmanski wasn't requesting.
Whitefish began working on the island power grid on October 2. But according to a motion submitted by the Fiscal Control Board before bankruptcy judge Laura Taylor Swain, by October 10 they had 41 brigade workers from Jacksonville, Florida. The company had subcontracted the Jacksonville Electric Authority (JEA) to work on the grid.
On October 17, the amended contract between Whitefish and PREPA, which included jacked up rates both for their own personnel, as well as their subcontracted companies, was formally signed by Ramos and Techmanski.
Here is the original contract between PREPA and Whitefish, as well as the final rates agreed upon:
El Director Ejecutivo de la AEE ofrece conferencia de prensa para hablar sobre la cancelación del contrato Whitefish. En la foto Ricardo Ramos. (Nahira Montcourt/NotiCel)