The Rand Report
After over a year of requests under the Freedom of Information Act, Mammoth received a copy of a detailed independent assessment of the reasonableness of the emergency master service agreement dated October 19, 2017 between the Company’s subsidiary Cobra and PREPA for repairs to PREPA’s electrical grid as a result of Hurricane Maria.
This report, titled “Reasonableness Analysis of Cobra Acquisitions, LLC Emergency Contract – Cost Validation Report” dated March 28, 2019 (the “Rand Report”), was prepared at the request of FEMA by the Homeland Security Operational and Analysis Center (“HSOAC”), a federally funded research and development center operated by the Rand Corporation for the U.S. Department of Homeland Security. FEMA’s request for the Rand Report followed a December 22, 2017 Determination Memorandum produced by FEMA that found the master services agreement to be reasonable.
Key Findings:
+ Selection of Cobra was reasonable
“Having examined [the foregoing] aspects regarding the reasonableness of PREPA’s emergency procurement process, HSOAC finds that selecting Cobra for the MSA was reasonable considering FEMA policy on emergency situations and existing regulations regarding contracting.” (page 14)
PREPA adhered to procurement statutes and policies in awarding the contract to Cobra
“PREPA adhered to Puerto Rican legal statutes regarding emergency situations and remained consistent with their own internal policies.” (page 14)
“Thus, according to this evaluation of the procurement process HSOAC concludes that PREPA engaged in a reasonable procurement process given the circumstances following Hurricane Maria.” (page 14)
+ Cobra’s rates were reasonable
“We conclude that Cobra’s blended rates fall within representative ranges for high voltage emergency repair work. This conclusion is delivered from analytical investigation which combined knowledge of work conditions, assumptions into wage burdens, evaluation of the equipment quantities and workforce structures, different assumptions about fuel costs, and inclusion of the best benchmark data and current adjustment factors available at this time.” (page 48)
“Cobra’s blended rates fall within estimated ranges in all scenarios we considered.” (page 47)
+ Cobra Was Uniquely Positioned to Respond To This Crisis
“Cobra was uniquely positioned for rapid response to the crisis, deploying heavy equipment to seaports to barge transports on the day after contract signature (10/20/17). Transmission work on the island began on 10/31/17, two weeks after Cobra was awarded the contract. Furthermore, a fully equipped crew of 463 lineman and 200 support staff arrived on the island within 3 weeks of contract signing (11/13/17). This fully equipped crew was composed of quantities of linemen and security which greatly exceeded the levels proposed in the MSA. This timely delivery of quantities of work and support labor, in excess of the levels initially proposed quickly (three weeks after the MSA was signed), clearly reflects responsiveness to requirements for both immediate availability and contract flexibility.” (page 22)