October 27, 2017 / 2:53 PM / a year ago

CORRECTED-UPDATE 2-Questions over Montana firm's Puerto Rico deal grow as FEMA cites concerns

(Corrects to say Agency, not Administration, in paragraph 2)

WASHINGTON, Oct 27 (Reuters) - Questions over a multi-million dollar contract between Puerto Rico’s power utility and a small Montana firm to repair storm damage grew on Friday as federal emergency officials raised “significant concerns” about the deal.

The Federal Emergency Management Agency, in a statement, said that after its initial review it “has not confirmed whether the contract prices are reasonable” under the agreement between Puerto Rico Electric Power Authority (PREPA) and Whitefish Energy Holdings.

The $300 million contract between PREPA and Whitefish was awarded to the two-year old firm with just two full-time employees without a competitive bidding process, according to media reports.

U.S. lawmakers have also raised concerns and are seeking more information about the deal.

A copy of the contract surfaced online Thursday night, raising more questions, particularly over language blocking oversight of costs and profits.

“In no event shall PREPA, the Commonwealth of Puerto Rico, the FEMA administrator, the Comptroller General of the United States or any other authorized representatives have the right to audit or review the cost and profit elements,” according the document posted by a Daily Beast reporter.

Democratic staffers for the U.S. House of Representatives’ Natural Resources Committee separately confirmed the authenticity of the contract and prices under the contract published by Spanish-language media outlet Noticel, according to one of the aides.

Costs listed for hourly wages ranged in the hundreds of dollars and daily per diems of more than $330 for accommodations and nearly $80 for food, according to the “bid schedule” published by the outlet. The document put the cost of one-way airline flights for employees at $1,000.

A spokesman for Whitefish defended the deal and said the company welcomed an audit of its work.

“The contract was done in good faith with PREPA” and “speaks for itself,” Whitefish spokesman Ken Luce told MSNBC in an interview, adding: “There’s nothing there.”

Puerto Rico’s governor, Ricardo Rossello, has also defended the contract. Despite the contract language, however, Rossello had ordered an audit and has said he expects initial results to be released later on Friday, NBC News reported.

Representatives of PREPA did not immediately respond to requests for comment.

About one million people do not have clean water and millions are without power weeks after Hurricane Maria made landfall on the U.S. territory.

At least 49 people have died in Puerto Rico, with dozens more missing. The hurricane did extensive damage to the island’s power grid, destroying homes, roads and other vital infrastructure. (Reporting by Susan Heavey, Richard Cowan, Jessica Resnick-Ault and Nicholas Brown; Editing by Jeffrey Benkoe and Dan Grebler)

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