Oversight Board warns Puerto Rico agencies: OMB authorization does not equal contract approval
By THE STAR STAFF
The Financial Oversight and Management Board for Puerto Rico issued a formal notice on October 7 clarifying that government agencies are misinterpreting the contract review process and, in some cases, bypassing mandatory Oversight Board approval for multimillion‑dollar agreements.
In a letter sent electronically to Fiscal Agency and Financial Authority Interim Executive Director Vicky González Vega, Office of Management and Budget (OMB) Director Orlando Rivera Berríos, and Governor’s Chief of Staff Norma Burgos Andújar, the Oversight Board said it has learned that some agencies believe submitting a contract to OMB under Circular Letter 006‑2025 or receiving OMB authorization automatically satisfies PROMESA’s Section 204(b)(2) review requirements. “Neither is correct,” General Counsel Jaime A. El Koury wrote.
Under the Contract Review Policy, all contracts or related series of contracts with an aggregate expected value of $10 million or more must be submitted directly to the Oversight Board for review and approval before execution—regardless of whether OMB or the Chief of Staff has already authorized them. The requirement also applies to amendments, extensions, and modifications, even when they do not change the contract’s value.
The Board emphasized that its review is an independent step designed to ensure that public contracting promotes market competition and aligns with certified fiscal plans. “An authorization issued by OMB under the Circular Letter does not eliminate, replace, or otherwise satisfy the Oversight Board’s review,” the letter states. Agencies may not execute any proposed contract or amendment until the Board issues its determination.
The Oversight Board also reminded officials of existing submission deadlines: 15 business days before execution for new contracts and 30 calendar days for amendments, including extensions and non‑monetary changes. These timelines, the Board said, are not altered or suspended by the Circular Letter and must be followed.
To avoid duplication and confusion, the Board asked that each proposed contract or amendment be submitted only once—either by OMB or by the contracting agency, but not both.
