A Democratic congressman 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.
A company spokesperson for Whitefish Energy Holdings said the company would be happy to answer any questions Congress may have.
“It’s unclear what they think the issues are or what their jurisdiction is, but we would certainly be cooperative,” said Whitefish Energy spokesman Chris Chiames.
The Puerto Rico Electric Power Authority awarded the contract to Whitefish Energy Holdings to help crews restore transmission and distribution lines damaged or destroyed during Hurricane Maria.
At the time, the company only had two employees and its largest federal contract had been a $1.3 million deal to replace and upgrade parts of a 4.8 mile transmission line in Arizona.
Rep. Raul Grijalva of Arizona, senior Democrat on the House Natural Resources Committee, said Congress "needs to understand why the Whitefish contract was awarded and whether other, more cost-effective options were available."
Rep. Greg Gianforte of Montana serves on the same committee. His press secretary directed questions Tuesday to the committee's staff.
Chaimes said the company already had a connection with PREPA before the hurricane struck on Sept. 20.
Whitefish CEO Andy Techmanski visited Puerto Rico in late summer while on vacation and established contact with PREPA and discussed potential future work, Chiames said. When Maria struck, Whitefish was one of the companies that power authority officials were able to reach by satellite phone.
"We got here quicker than anybody else and we built a plan that PREPA had confidence in," Chiames said in telephone interview.
The company’s business model is to ramp up quickly when it earns a contract.
At this point, Chiames said the company has 300 people working in Puerto Rico. Its numbers are growing by about 10 to 20 a day as workers obtain the necessary clearances to begin working in the U.S. territory.
“Our goal is 1,000-plus,” Chiames said. “How fast that occurs depends on a number of factors. We have 100 in the queue to come online. … There is a steady stream of interest.”
The company has been tasked with rebuilding six transmission lines that go from the southern end of the island, where most of the power generation capabilities are located, to the north where the industrial and population centers are found.
Crews are working in difficult and rugged terrain and face challenges getting the necessary equipment to the sites.
“Many times we are first on the scene to assess the damage,” Chiames said. “We have had to revise what needs to be done completely once we actually see it.”
Ricardo Ramos, director of Puerto Rico's power authority, said the government has a $300 million contract with Whitefish and a separate $200 million contract with Oklahoma-based Cobra Acquisitions after evaluating up to six companies for the job.
Whitefish was one of two companies on the government's shortlist, Ramos said. The other company was requiring a $25 million down payment, given the power authority's troubled finances. PREPA filed for bankruptcy in July and has put off badly needed maintenance for years. It just finished dealing with outages from Hurricane Irma in early September.
Whitefish is providing hotel rooms for it workers and brought its own materials, Ramos said.
"They're doing an excellent job," he said.
The Interior Department said Zinke, a former Montana congressman, played no role in the contract award. Zinke's son had a summer job at a Whitefish construction site.
"Neither the secretary nor anyone in his office have taken any meetings or action on behalf of this company," the department said in a statement.
Zinke knows Techmanski "because they both live in a small town where everyone knows everyone," the statement said.
Grijalva said lawmakers also need to know why the Federal Emergency Management Agency, the Army Corps of Engineers and public sector utilities "failed in Puerto Rico to conduct the disaster-response planning they carried out ahead of other disasters this year" in Texas, Florida and other states.
In a briefing last week, U.S. Army Corps of Engineers Lt. Gen. Todd Semonite said responding to the hurricanes on the island and mainland were completely different paradigms.
On the mainland, Semonite said power companies can call on neighboring states to help respond with hundreds of crews following a hurricane. That wasn’t possible on Puerto Rico.
Semonite said it could take nearly a year for the Corps, working in concert with PREPA, to fully restore power to all the island’s inhabitants.
The Corps of Engineers has spent or committed about $1.1 billion in funding through the Federal Emergency Management Agency, including a recent $240 million contract to Fluor Corp. for work on power restoration. Semonite said the eventual cost of the Fluor contract could reach $1.3 billion.
Chiames said Whitefish Energy’s contract is with PREPA.
Whitefish Energy was formed in 2015 by Techmanski, who had more than 20 years experience in the electrical field in the West.
Techmanski told the Flathead Beacon he hoped to build a transformer manufacturing plant on the former site of the Columbia Falls Aluminum Co. in partnership with a Brazilian firm. But the deal had not materialized because Whitefish needed up to $20 million in orders to make it happen.
NBC Montana reported Oct. 1 that Techmanski had asked Zinke for help in getting personnel and equipment to Puerto Rico.
Chiames confirmed that to the Washington Post.
“Once the company got the go-ahead from PREPA on September 26 to begin work, company executives did reach out to contacts in case they could help expedite getting qualified linesmen to the island,” he said.
But he took issue with the Post's characterization of the $300 million contract with Whitefish as unusual.
"We're here. We have a good-sized workforce and we're building a bigger one," Chiames said. "We're doing work while others are still trying to figure out how to get here. The Washington Post spent a week reporting that story and all they could come up with was allegations, but there's no proof of anything nor will there be because the work we secured was directly with PREPA.
"It didn't involve federal officials," he said. "We're not working for the federal government. We're working for PREPA."
This story contains information from the Associated Press.