Seven months after a federal judge blocked the V.I. Housing Finance Authority from moving forward with seven projects amid a contractor’s claims of procurement violations, VIHFA has taken the matter to the Third Circuit Court of Appeals.
U.S. District Court Chief Judge Robert Molloy granted a preliminary injunction to environmental services firm Gandee and Associates in September after the contractor accused VIHFA of unlawfully rescinding contracts and awarding them to competitors at “grossly inflated” costs. Gandee claimed the semi-autonomous agency rescinded seven project awards after the company noted discrepancies between the scope of work outlined during the solicitation process and the contracts themselves. In a searing opinion, Molloy noted that Gandee’s attempt to communicate the discrepancies directly to VIHFA “rang flat.”
“It was distorted, disputed, ignored, and refuted, as it traveled up the ranks and across procurement, contracting, and legal departments at VIHFA — finally culminating in the instant federal lawsuit that could easily have been averted had VIHFA simply adhered to its own published policies and procedures,” he wrote. “Instead, VIHFA appears to have doubled down in a brazen display of disregard for its duty to the public.”
VIHFA’s attorney, Shari D’Andrade of the law firm Kellerhals Ferguson Kroblin, argued in an appeal filed Wednesday that Gandee never had any executed contracts and that the injunction “disrupts federally funded disaster recovery projects and interferes with the timely administration of public programs.”
“Although the public has an interest in fair procurement processes, that interest does not require the extraordinary remedy of an injunction in the absence of a binding contractual entitlement or a showing of irreparable injury,” she argued.
D’Andrade wrote that the case did not involve depriving Gandee of its contractual rights.
“It involves a contractor who did not execute draft agreements, raised concerns about their terms, and never reached agreement with the agency — yet now seeks to transform that unconsummated negotiation into a constitutional claim,” she argued.
Separately, VIHFA found itself in the spotlight last week after V.I. Water and Power Authority Chief Executive Officer Karl Knight said bureaucratic bottlenecks at the agency, which administers federal funding from the U.S. Housing and Urban Development Department, had delayed much-needed funding to the utility.
“There’s $38 million caught up for projects that could make a meaningful difference in the reliability of our system,” he told WAPA board members last week.
Outgoing VIHFA Executive Director Eugene Jones Jr. fired back in an open letter, saying Knight’s claims are “categorically false and reflect a last-ditch and disingenuous effort by the leadership of the utility, to deflect its responsibility by attempting to position the Authority as a scapegoat for its ongoing systemic shortcomings and deficiencies, including the inability to provide consistent power to the people of the Virgin Islands.”
