According to recent reports the governor of one eastern state has come under fire for firing the main contractor that his administration has hired to take charge of processing and handling the housing grants from the victims of Hurricane Sandy. Hurricane Sandy was a category 3 hurricane that hit the east coast in the fall of 2012. It left billions of dollars’ worth of damage to personal and public property in its wake.
Louisiana residents may find it interesting to learn that the firm let go by the Governor of New Jersey was a Louisiana firm. Some have raised questions about the unexpected and sudden termination of firm Hammerman & Gainer’s contract. In particular, at issue is the potential impact on how federal stimulus funds will be disseminated to eligible Hurricane Sandy victims that need the money to restore and repair their homes and businesses.
The firm, HGI, is a Louisiana company that also played a leading role in processing recovery applications for Hurricane Katrina victims. In this case, they received a $68 million contract in the spring of 2013 to run housing recovery centers and process applications from New Jersey storm victims. They only processed applications from Hurricane Sandy victims that needed assistance with rebuilding their homes. The firm was also an important contractor for the state’s biggest homeowner-relief initiative. That initiative, known as the Reconstruction, Rehabilitation, Elevation and Mitigation Program, provided grants that were worth up to $150,000.
However, at a Hurricane Sandy Recovery Funding hearing numerous Sandy victims testified and expressed ongoing frustration with the application process, receiving grants and even getting basic questions answered. The state of New Jersey and the firm negotiated regarding the ongoing work and both agreed to end the three-year contract prematurely in December 2013. Officials with the firm did not give any reason for why the state essentially fired the firm or the nature of the legal or business disputes except to state that the company’s lawyers were still engaged in talks with the state. According to reports, the Louisiana firm is to receive about $9.5 million to conclude the contract.
Contract disputes are an unfortunate reality of today’s business world. When they happen, seeking advice from an experienced attorney may be a good first step to take. Even if an original contract goes south, a strong negotiation may present a resolution that satisfies both parties, as may have been the case here. From small business to multi-million dollar corporations, sound legal advice may be the key to obtaining the best possible outcome.
Source: NJ.com, “Christie administration ends contract with firm distributing Sandy grants,” Erin O’Neill, Jan. 23, 2014