Mammoth Energy defends contracts to restore power to Puerto Rico and welcomes federal investigations

Oklahoma City based Mammoth Energy Services and its subsidiary Cobra are standing by their contracts to restore power to hurricane-damaged Puerto Rico even as they are now under investigation by two federal agencies.

The Federal Bureau of Investigation and the Department of Homeland Security’s Inspector General are reported to be looking into the work of the Oklahoma City-based subsidiary and how it came to dominate the power restoration efforts following the 2017 hurricane.

In a statement issued on Friday, Mammoth defended its work and how it obtained the contracts.

“Mammoth stands by the quality and reasonableness of its work and welcomes an open inquiry into its performance.”

Mammoth explained Cobra was initially awarded a $200 million reconstruction contract in 2017 and through five separate amendments, the total contract amount was increased to $945 million. Cobra was awarded a second contract in the amount of $900 million and it was made in response to a Request for Proposals process carried out and reviewed by the Puerto Rico Electric Power Authority.

“All of the agreements relating to the work provided by Cobra were negotiated, and entered into, with PREPA.  The detailed agreements set forth the rates charged by Cobra and well as other information regarding the services to be performed. PREPA was assisted by various agencies including the Office of Contract and Procurement Compliance (OCPC), the Financial Oversight and Management Board (FOMB), the Governor’s Office and the Central Office of Recovery, Reconstruction and Resiliency (COR3),” stated Mammoth in its response on Friday.

The company also explained the work to replace the nation’s electrical grid was in an “extraordinarily challenging environment.” The island was without power, roads and bridges had been destroyed and no housing was available for the 600 workers who eventually were sent to the country.

“PREPA regularly and thoroughly reviewed Cobra’s work.  In addition to ongoing oversight of the services performed to ensure that work was being provided in a thorough and professional manner and consistent with industry standards, PREPA performed a detailed review of invoices submitted by Cobra to ensure that all payments were made in accordance with the contracts and in connection with services that had been properly provided.  When work was completed on an individual project basis, an invoice was issued to PREPA for the specific project.  As of April 10, 2019, Cobra has submitted approximately $1,296 million in invoices and received approximately $1,057 million in payments. ”

Mammoth said Cobra leaders have been in contact with various congressional members who reviewed the work and assessed the damage.

“Further, it has been reported that an independent evaluation of Cobra’s work by the Rand Corporation said that the contract rates charged for its services were reasonable considering the “situational uncertainty that prevailed” after Hurricane Maria.

Click here to review entire statement from Mammoth Energy.

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