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  • Writer's pictureThe San Juan Daily Star

Fiscal board rejects contract amendments for microgrid project at Roosevelt Roads

Joel Pizá Batiz, executive director of the Local Redevelopment Authority for Roosevelt Roads

By The Star Staff

The Financial Oversight and Management Board (FOMB) has declined amending a contract to develop a renewable energy microgrid at the now defunct U.S. Roosevelt Roads Naval Base, according to a recent letter.

The Dec. 29 letter sent by the oversight board’s general counsel, Jaime A. El Koury, to Local Redevelopment Authority for Roosevelt Roads (LRA) Executive Director Joel Pizá Batiz said the changes were rejected because they were proposed without a competitive tender process.

Under its contract review policy, the oversight board reviewed the proposed assignment, assumption and transfer agreement under the renewable energy microgrid management agreement (MMA) between the LRA and IBD Energy (IBD), and the first amendment to the MMA.

After reviewing the proposed contracts, the oversight board “rejected” it.

In essence, the board said it understands that the transfer of IBD’s rights and obligations under the MMA to PRIP RR under the proposed assignment, as well as the renegotiation of the original terms of the MMA according to the proposed amendment, without conducting a competitive process, are contrary to the principles of market competition.

“The FOMB believes that competitive procurement processes are critical for the integrity of contracts, effective economic development, and Puerto Rico’s fiscal stability,” the oversight board said.

The former Naval Station at Roosevelt Roads is a unique property with significant value for Puerto Rico’s economic future, the board added, noting that its development must be made pursuant to competitive processes that ensure best market prices from the most qualified developers.

“Only confidence in the procurement process through public requests for proposals and a deliberate and effective selection process based on the best offer can ensure Puerto Rico maximizes the value and development of this important property,” the oversight board said.

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.

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