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Contracts totaling $10 million or more already had to be approved by the Board before being effective, but now they will also require statements signed by government agencies on the transparency of the hiring process. (GFR Media)

Washington - The Fiscal Oversight Board, in charge of Puerto Rican government finances, tightened yesterday its rules to review public contracts that reach $10 million, and included the Legislature and the Judiciary Branch in the directive.

The Congress appointed Board that controls public financial decisions, claimed that it will have special emphasis on projects aimed to the island´s reconstruction, which must represent tens of billions of dollars.

Contracts totaling $10 million or more already had to be approved by the Board before being effective, but now they will also require statements signed by government agencies on the transparency of the hiring process.

"Supervision of the Puerto Rico government's procurement process is necessary to increase the effectiveness and transparency of public sector finances and increase the public's faith in the process," said Natalie Jaresko, Board´s executive director.

The Board´s public policy to review contracts exceeding $10 million was implemented in October, during the Whitefish scandal, when PREPA granted a $300 million contract to the Montana-based instead of immediately activating mutual support agreements with US public companies.

As part of its regulations, agencies such as the Puerto Rico Fiscal Agency and Financial Advisory Authority (FAFAA), Public-Private Partnerships Authority (P3), Authority for the Financing of the Infrastructure (AFI), Aqueducts and Sewers Authority (PRASA), PREPA, Industrial Development Company (PRIDCO) and Federal Affairs Administration (PRFAA) must submit signed certifications about the contracting process.

For example, the Board claims a list of contracts and certifications for value of more than $1 million.

It also asks to detail "compensation, third parties relationships, potential conflicts of interest and any action with the purpose of influencing public officials in connection with the acquisition, negotiation or execution of a contract".

The certification must be signed by the agency´s CEO or another official with the authority to subscribe that type of document.

Last February, Congress validated - as part of the allocations bill that awarded nearly $15 billion in funds to mitigate the disaster caused by Hurricane Maria -, the Board's decision to require examining contracts of more than $ 10 million before their implementation.

Then, Congress also ordered the government of Puerto Rico to submit, in early August, a 12 to 24 months recovery plan coordinated with agencies such as FEMA.

According with the expanded Board rules, its intention is to make a decision on the contracts it reviews within seven days.

But Christian Sobrino, representative of the governor before the Board and president of the Government Development Bank (GDB), said that the fiscal authority has not always complied with that term.

Sobrino said that a GDB contract examination - related to a sale of a property for which proposals were requested - took two to three weeks.

For Sobrino, that is a complaint he has heard from other officials of the government of Puerto Rico. But, so far, he understands that the Board has not rejected any contract.

Sobrino said that the Board has considered that contracts of $10 million or more represent an amount that can be managed and reviewed before they are implemented.

"My impression is that (with the extension of procurement rules) it wants to expand its applicability to also include the Legislature and the Judiciary Branches. They also include signed certifications that were already granted in the government ... The reality is that we have no problems with reviewing the contracts," Sobrino said in a telephone interview.

Jaresko said in a press release that "the new policy will promote competition, and ensure that all contracts are in compliance with the fiscal plan in a manner that restores the economic and fiscal health of Puerto Rico".

The Board intends to dedicate a tab on its website to contract reviews, including a report on the status of the review.

Financial Statements

On the other hand, the Board disclosed its members and senior officers’ financial statements for the first quarter of 2018.

According to José B. Carrión, president of the Board, the statements from January to March 2018 "clarify concepts" and implement changes in the annual form they have to complete.

Espacios Abiertos (Open Spaces) considered that the Board´s financial statements are very general and incomplete.


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