Puerto Rico to cancel $168M port scanning contract
Puerto Rico Gov. Jenniffer González said Monday that her administration will terminate its multimillion-dollar contract with S2 Services Puerto Rico LLC, which operates the electronic container inspection system at the island’s ports.
Speaking at a press conference at the La Fortaleza executive mansion, the governor said the cancellation will take effect in 90 days.
“The reality is that in 2008, when I was a legislator, I filed a bill so that the Ports Authority would scan everything entering through the ports to ensure public safety,” González said.
“Today is an important day because for years we have spoken about the multiple costs that consumers face, while contracts are approved that make it harder for industries to bring merchandise, passing those charges on to the consumer,” she said.
The contract has cost the government $168 million, but González said it has yielded “zero results.”
“Every single scan conducted has never been referred to the Police, Treasury or federal agencies,” she said. “That means the people of Puerto Rico have been tied to an excessive contract with a company charging about $11 million a year, without producing a single result.”
She added that while the government paid for inspections, they were not performed as required. From 2016 to 2024, 4,510 containers went unscanned, and more than 3,400 inconsistencies were detected.
The scanning system was first implemented about a decade ago to help the Treasury Department improve tax collections.
Chamber of Food Industry Marketing and Distribution Vice President Manuel Reyes welcomed the decision.
“The private sector has been united since the beginning in saying this was not going to be effective, and 15 years later it has been proven it was not,” he said.
Ports Authority Executive Director Norberto Negrón said the contract was initially awarded to Rapiscan Systems and later transferred to its subsidiary, S2PR. “We are cancelling the contract because it’s excessive,” he said.
PRPA requested approval of new contract back in February 2025. The original contract in 2010 was set to expire in 15 years (2025). They wanted to extend the term to 2033, and later amended it to last until 2041!!! The Financial Oversight and Management Board for PR instructed PRPA to keep the 2025 expiration date for current contract and open a competitive process to award a new contract. I guess that this action by the government is in response to OFMB-PR Feb 24, 2025 letter to PRPA. Let see what happen next.
I get the sense this is less of a true “cancellation” and more just letting the 2010 deal run its course. The governor’s framing makes it sound like she pulled the plug, but really she’s following FOMB’s directive to let it sunset. Calling it a cancellation sells it as a win for austerity, while throwing some red meat to her die hard followers, for cheap political points. Let’s see how the competitive process plays out ahead.