N.J. Official: Sandy Contractor Ousted Over Performance

By Geoff Mulvihill | February 26, 2014

A member of New Jersey Gov. Chris Christie’s cabinet acknowledged for the first time Monday that performance problems are the reason a contractor hired last year to handle applications for New Jersey’s biggest post-Superstorm Sandy housing recovery program is no longer working for the state.

Community Affairs Commissioner Richard Constable fielded questions from a state Senate committee about Hammerman and Gainer. The New Orleans-based firm stopped doing work for the state in December, though state officials did not say it had been dropped for nearly two months.

State officials have been coy about why and when HGI stopped working for the state. In a testy exchange at a town-hall meeting last week, Christie himself ducked the question from a citizen.

The firm and its dismissal have been a flashpoint of anger for storm victims and their advocates who say the state has mishandled parts of its Sandy recovery efforts and have been opaque about details.

Constable gave just a bit of clarity, saying that he could not get into specifics because of possible litigation. A company spokeswoman did not immediately return a call from The Associated Press on Monday afternoon.

Constable defended the hiring of the company last year, saying it bid $68 million over three years for the work of handling applications for a state-run program that uses federal grants to help homeowners repair or rebuild home damaged by the October 2012 storm. He said the other bidder offered to do the work for $193 million.

“It would have been irresponsible for the state to take the higher bidder,” Constable told the state Senate government oversight committee. “We obviously became aware of concerns that members of the public had.”

He said the state communicated its complaints with HGI and that the decision to end the contract was mutual. He said a $10 million payment to the firm was not severance but rather a remaining invoice for work it performed.

Constable said the work is now being handled by a combination of state employees and other contractors.

He also defended the state’s decision to hire contractors to run so many parts of the housing programs. By contrast, senators were told at the hearing, New York used state employees to oversee the programs and community nonprofits groups to interact with the applicants.

“If there was a foolproof model, we would use it,” Constable said. “One could argue if a different contractor was picked, maybe the outcome would have been different. Let’s just be careful that simply utilizing the philanthropic community is a panacea.”

Constable and Republican members of the committee said a big part of New Jersey’s problem in handling Sandy recovery programs is the federal allocation. They said that estimates of damage to New York and New Jersey were similar — $42 billion in New York and $37 billion in New Jersey.

But the federal money allocated to the two states and New York City for recovery programs of their own design have been unequal with New York state and city so far being granted more than $7 billion and New Jersey $3.2 billion, so far.

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