Fired Sandy contractor seeks $18 million from N.J.

Posted: February 28, 2014

The Louisiana firm that administered a Sandy housing recovery program says the Christie administration demanded the company perform work that "far exceeded" its capacity and is seeking $18 million in outstanding invoices.

Documents obtained and posted online Wednesday by the Fair Share Housing Center of Cherry Hill through a public-records request reveal an ongoing dispute between New Jersey and Hammerman & Gainer Inc. (HGI), whose three-year, $68 million contract was abruptly terminated in December without public notice.

The contract, which began last May, was to run through May 2016. HGI oversaw the distribution of $700 million in housing money under the state's Rehabilitation, Reconstruction, Elevation, and Mitigation (RREM) program.

"I think we had fundamental disagreements about how this should be done," Gov. Christie said on New Jersey 101.5 radio's Ask the Governor program Wednesday evening.

On Monday, Richard E. Constable, commissioner of the Department of Community Affairs, which is overseeing the recovery, told a legislative committee that "lawyers are engaged" in sorting out the dispute. He and other state officials have declined to elaborate on why HGI was fired.

The state "made repeated demands that HGI perform work that extended beyond the scope of the services delineated in the contract and required completion within an accelerated time frame" not outlined in the contract, lawyers for HGI wrote in a Feb. 7 demand for arbitration filed with the American Arbitration Association.

HGI agreed to complete the additional work, the filing says, based on assurances that it would be compensated for the unexpected costs.

Through Dec. 6 - the date the state terminated the contract - HGI issued invoices for $51 million, of which it says $18 million is still owed.

The company did not provide the state with weekly progress reports, as the contract required, according to Fair Share Housing. A Community Affairs Department spokeswoman did not respond to a request for comment, and HGI could not be reached.

In a Feb. 11 letter, the state Attorney General's Office asked the McCarter & English law firm, which represents HGI, to withdraw its demand for arbitration, according to the documents.

The state said HGI had not given it enough time, per the termination agreement, to "amicably resolve any outstanding issues."

"If you do not withdraw it, the state will contest HGI's right to arbitration," acting Attorney General John J. Hoffman wrote.



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