Puerto Rico Review Finds $133 Million Contract Improperly Given

(Bloomberg) -- A disaster-response company misled Puerto Rico officials to win a $133 million rebuilding contract and the deal should be canceled, an independent review board found Tuesday.

The panel that oversees Housing Department contracts found flaws in the winning bid from Utica, New York-based Adjusters International Inc., which pledged to handle 75,000 potential home rehabs, according to a copy of the decision obtained from AECOM, the world’s biggest engineering firm and a competing bidder.

The decision was confirmed Tuesday by Housing Department spokeswoman Leticia Jover. The department and the closely held company could still appeal the finding.

The affair could further sully the reputation of the Puerto Rico government as it prepares to receive billions in federal rebuilding aid. The government was widely criticized for a power-line contract it awarded to Whitefish Energy Holdings LLC, a two-person Montana company that didn’t appear to have relevant experience. The deal was later scuttled. Also at stake are the home repairs themselves, as tens of thousands of Puerto Ricans continue to live in temporary housing or structures unfit for habitation.

Waldo Diaz, a spokesman for Adjusters International, said in a text message that he declined to comment on Tuesday’s decision.

The review board’s resolution found that the bid by Adjusters International failed to meet several requirements, including proper certification, in this case from the U.S. General Services Administration for Puerto Rico.

“It is an incontrovertible fact that Adjusters did not submit this required certification with its RFP, and this is acknowledged in its written statement,” said the resolution, signed by Godohaldo Perez Torres, chairman of the bid review board. “It tried to justify it by indicating that it had federal GSA certification.”

The call for bids set out a point system for evaluating proposals, with credit awarded for aspects including price and qualifications. Ten bonus points were awarded to bidders with a local partner, and the board found that Adjusters was improperly awarded those points.

It said Adjusters had a “teaming agreement” with LinkActiv, a San Juan area company that manages call centers, not a joint venture with a construction company.

AECOM Executive Vice President Vahid Ownjazayeri said in a prepared statement that the company thanks the review board for "correcting the decision."

"This determination will lead to a qualified team working on the country’s recovery efforts," he said.

©2018 Bloomberg L.P.

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