Transition Committee members express concern about private contractors, housing project expenses

Juan Zaragoza Gómez, at lectern, said a concern of incoming government transition committee members is that some private consultants under contract “function as operators.” “Their attitude is not to train people in order to leave, but to perpetuate themselves,” he said.

By The Star Staff

Juan Zaragoza Gómez, a member of the Transition Committee of governor-elect Jenniffer González Colón, said on Thursday that he is concerned about the large number of private contractors managing reconstruction funds in both the Central Office for Recovery, Reconstruction and Resilience (COR3) and the Department of Housing.

“Two years ago, I had a meeting with the federal undersecretary of Housing [and Urban Development] about the slowness of housing projects, and she highlighted the fact that [the island Department of] Housing was at its lowest point, that it had no people,” Zaragoza Gómez said at a press conference. “In that sense, we must recognize that the Department has made an effort where it has almost doubled the staff. Still, interestingly and simultaneously, one would expect that the expense of consultants would go down and that expense would remain quite stable.”

“And beyond the financial part, it worries us because one is on the street, and some consultants function as operators,” he added. “When I say operator, it is with the full intention of making a similarity between Genera and LUMA. When I say operators, it is this external entity that puts itself in the shoes of the government agency; that is, they are not necessarily consultants, they are entities that are performing functions that should be performed by [employees of the Department of] Housing, that interact with the municipalities, that interact with individuals. That is very dangerous; It affects the work environment and delays the transfer of knowledge; what it does is perpetuate the presence of these entities because, obviously, these entities do not have an ‘exit strategy.’ Their attitude is not to train people in order to leave, but to perpetuate themselves.”

César Alvarado Torres, another committee member, highlighted meanwhile the billions of dollars (more than $1 billion in COR3 and $448 million in Housing) that the at least eight firms contracted by those agencies have billed from 2017 to 2024.

“What draws my attention in the statement I make is that the documents show that there are two companies that repeat both in COR3 and in Housing among the eight companies that are participating. Of them, there are two: IEM International in Housing, which has $101 million, and ICA Incorporated LLC, which has $51.5 million,” Alvarado Torres noted. “In other words, the information is not an estimate; it arises from the documents we have during the discovery process. I repeat, we should not be shocked by the issue of contracting. The state must provide services, and if it does not have the expertise, it has to contract because it is not going to sit with its hands tied waiting for the thing to happen.”

Another point that caught the panel’s attention was the costs that the Public Housing Administration handles when constructing affordable housing. Blanca Fernández, the administrator of the Housing Financing Authority, said they have paid between $300,000 and $600,000 per unit.

“These numbers do not cease to stand out and offend,” Zaragoza said. “And that is what shows that here there is a lack of supervision, which has allowed excessive inflation in costs, because it does not cease to offend one, that you see them there, in the case of single-family units, which are a little box that has a cost of half a million dollars and again, that is what stands out is that here since the money is not from us, they are federal funds and there are also some federal tax credits, then there is a laxity in terms of the costs of building these units.”