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Juan Zaragoza Gómez, part of the Transition Committee for governor-elect Jenniffer González Colón, expressed concerns on Thursday regarding the significant number of private contractors overseeing reconstruction funds in the Central Office for Recovery, Reconstruction and Resilience (COR3) and the Department of Housing.
“Two years prior, I met with the federal undersecretary of Housing [and Urban Development] about the delays in housing initiatives, and she pointed out that [the island Department of] Housing was at its lowest, lacking personnel,” Zaragoza Gómez mentioned during a press conference. “In that regard, we must acknowledge that the Department has made strides, nearly doubling its workforce. Yet, interestingly, one would anticipate a decrease in consultant expenses, while those costs remain fairly constant.”
“Moreover, beyond the financial aspects, it troubles us since they are out in the community, and some consultants operate like operators,” he continued. “When I refer to operators, I intend to draw a comparison between Genera and LUMA. This term describes an external entity stepping into the role of the government agency; they are not merely consultants but entities fulfilling functions that should be carried out by [employees of the Department of] Housing, engaging with municipalities and individuals. This situation is quite perilous; it disrupts the work environment and hampers knowledge transfer, ultimately perpetuating the existence of these entities because, evidently, these entities lack an ‘exit strategy.’ Their approach is not to empower others for their departure, but rather to ensure their own continuity.”
César Alvarado Torres, another member of the committee, emphasized the billions of dollars (over $1 billion in COR3 and $448 million in Housing) that at least eight firms contracted by those agencies have invoiced from 2017 to 2024.
“What stands out in my statement is that the records indicate two companies appear in both COR3 and Housing among the eight participating firms. Specifically, IEM International in Housing, having billed $101 million, and ICA Incorporated LLC, which has billed $51.5 million,” noted Alvarado Torres. “To clarify, this data is not an approximation; it is sourced from the documentation we possess during the discovery phase. I reiterate, we should not be surprised concerning the issue of contracting. The state has to deliver services, and if it lacks expertise, it must contract out instead of remaining idle while waiting for developments.”
Another point that drew attention from the panel was the expenses incurred by the Public Housing Administration regarding affordable housing construction. Blanca Fernández, the administrator of the Housing Financing Authority, mentioned that they have spent between $300,000 and $600,000 per unit.
“These figures consistently stand out and are offensive,” Zaragoza remarked. “What this underscores is a significant lack of oversight, which has resulted in excessive cost inflation, because it is indeed shocking to see, in the case of single-family homes, a small structure costing half a million dollars; what stands out here is that since the funds do not come from us—they are federal funds, along with some federal tax credits—there is a certain leniency regarding the costs associated with constructing these units.”
