Fiscal board approves $76 million contract for Vieques hospital project ‘with observations’

The contract for the design and construction of a new hospital complex in Vieques stems from a competitive procurement process initiated last August.

By The Star Staff

The Financial Oversight and Management Board approved this week “with observations” a $76 million contract to build a hospital facility in Vieques whose real costs have been estimated to be at least $25 million more.

The oversight board reviewed the proposed contract between the Puerto Rico Infrastructure Financing Authority (PRIFA) and Caribe Tecno CRL and Firma de Ingenieros, Arquitectos & Asociados PSC for the design and construction of new medical facilities in the offshore island municipality.

After reviewing the contract, the oversight board approved it “with Observations.”

“For the avoidance of doubt, the review performed by the Oversight Board does not constitute a legal review of the contractual documentation or the contracting process, including without limitation: compliance with contracting requirements under applicable laws, rules, and regulations, both federal and local; and compliance with applicable laws, rules, and regulations governing procurement activities, both federal and local,” the board said.

The contract stems from a competitive procurement process issued on Aug. 18, 2022 and contemplates the design and construction of new medical facilities in the Municipality of Vieques that would occupy approximately 46,800 square feet, including a dialysis building and the central utility plant.

Additionally, the site will accommodate new parking areas and drop-off lanes, provide proper vehicle circulation by accommodating the flow of traffic to allow for the separation of emergency vehicles and private vehicles, and comply with helipad restrictions and clearances.

The proposed contract was approved by the Federal Emergency Management Agency (FEMA) allowing awards for permanent work projects to be based on fixed cost estimates, instead of the actual cost of the project.

“As such, if the actual cost of the project exceeds the fixed cost estimate agreed upon by FEMA and PRIFA, PRIFA is responsible for the additional costs,” the oversight board said. “However, if the actual cost is below the fixed cost estimate, PRIFA may use the remaining funds for other eligible purposes, such as for additional cost-effective hazard mitigation measures to increase the resiliency of public infrastructure.”

“Notably, PRIFA’s fixed cost estimate was $104.6 million, which is significantly higher than FEMA’s cost estimate of $48.3 million,” the board added. “PRIFA informed the Oversight Board that this difference corresponds to the fact that the estimate made by FEMA did not contemplate the impact of costs related to regulatory requirements, existing codes, and requirements of the Auxiliary Secretariat for Regulation and Accreditation of Health Facilities and the Department of Health, among others.”

The proposed contract has a maximum payable amount of $75.9 million. “The Oversight Board’s review indicates that PRIFA has sufficient budgeted funds to cover the cost of the Proposed Contract. This determination does not consider the extent to which total available funds will be subsequently encumbered by PRIFA throughout the Proposed Contract’s term,” the oversight board said. “Consequently, we rely on PRIFA’s budget certification for the purposes of this review.”