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No bids, no problem in Sandy cleanup State says contract process slows work that must be started immediately

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Even as utility crews from across the country swarmed New Jersey ahead of Hurricane Sandy, another industry began amassing a presence here — disaster-recovery contractors.

A big storm like Sandy is a big opportunity for companies whose work is to get hard-hit areas back in working order. But before they can begin the challenge of cleanup, they first must win business in emergency conditions that don't necessarily include standard bidding processes.

"We come in with the technical expertise and the understanding of how to do it," said Jared Moskowitz, executive vice president and general counsel at Florida-based AshBritt Inc.

The company has extensive experience cleaning up after hurricanes, blizzards, windstorms and other natural disasters, including in the Northeast. Moskowitz said his firm has the know-how to collect, dispose of and recycle everything from tree trunks to refrigerators. Just as importantly, he said, they know how to deal with the Federal Emergency Management Agency, which has an intricate set of requirements that must be met before the agency will reimburse cleanup costs.

AshBritt isn't the only firm setting up shop here. Troy Garrett, president of Minnesota-based Ceres Environmental Services Inc., said his company had personnel in place even before Sandy hit New Jersey's shores.

"I had a team out in Trenton and Philadelphia and up in New York actually riding the hurricane out, so we could assess damage and do aerial reconnaissance right off the bat," Garrett said.

Ceres is already at work in New York, but it hasn't been as easy to get work in New Jersey. That's because New Jersey chose AshBritt for a potentially lucrative, no-bid state contract. The contract serves as a ready-made framework that local governments can use if they choose to hire AshBritt; otherwise, towns and counties must either do the work themselves or go through the time-consuming process of soliciting bids.

Rather than bid out the AshBritt contract, New Jersey adopted wholesale a 300-page pre-emptive contract AshBritt signed with Connecticut in 2008, to become effective in the event of a disaster. Connecticut estimated the value of its contract with AshBritt at $100 million. The New Jersey deal simply includes a provision saying New Jersey laws win out if any contract clauses conflict with state regulations.

Bill Quinn, a spokesman for the state Department of Treasury, said the state has the authority during times of emergency to sign contracts without the normal procurement procedures.

"If they had gone through the standard bidding process, it would have taken weeks or months — and (the state had) an immediate need for capabilities which AshBritt had," he said.

Though the New Jersey contract wasn't bid out, Quinn noted the Connecticut contract was, and the New Jersey deal grandfathers in the same prices offered in the four-year-old Connecticut agreement. Moskowitz said the Connecticut bidding process took several months and involved all of his firm's national competitors, totaling more than 10 firms.

Still, the arrangement puts companies like Ceres at a competitive disadvantage.

Matthew Weng, staff attorney with the New Jersey League of Municipalities, said New Jersey sets up state contracts for a variety of services — even office supplies. He said state contracts are generally the simpler option.

"It's easier if you go through the state contract because it doesn't have to go through a public bidding process," Weng said.

Garrett said he hopes local governments will shop around, because prices can vary widely.

"They're going to overpay for the services," he said.

He believes he can save counties and towns money, in part due to lower administrative costs.

Regardless of what contractor a local government chooses, the odds are good that New Jersey workers will be involved, as both Ceres and AshBritt use local subcontractors.

"Right now, 75 percent of all the work getting done (by AshBritt) is being done by New Jersey contractors," Moskowitz said. He said that number is likely to surpass 80 percent as the company signs more towns and subcontractors.

AshBritt has engaged the Conti Group, in Edison, to locate local contractors. The firm also is taking recommendations from towns that have a reliable contractor, to see if that contractor can be folded into the state contract.

The state has also executed contracts with two debris-removal monitoring firms, a service required for FEMA reimbursement. Both companies plan to hire New Jersey workers.

"Once we determine where our services are needed, we typically hire new local staff to meet those needs, as we've done with recovery efforts for more than 25 different nationally declared disaster events," said John Buri, director of client services in the disaster recovery division of Virginia-based SAIC, in an e-mail.

The other monitoring contract went to Arcadis, a Dutch firm with U.S. headquarters in Colorado.

Spokeswoman Debra Havins said Arcadis has already hired some 120 temporary staffers through its Rostan Solutions unit to help with the cleanup effort in New Jersey and New York. The company did not have a breakdown of how many new staffers were from New Jersey.

Havins said the size of its work force is likely to ebb and flow, but "we expect to keep at least 100 temporary workers for the next several weeks."

Both companies also have permanent offices in the state.

On Nov. 13, New Jersey issued a Request for Information related to debris cleanup. Department of Environmental Protection spokesman Larry Hajna said the request was related to future procurement of debris-removal management services. He said respondents were asked to provide pricing information from any previous contracts with public entities. Quinn said 28 firms responded to the request, though the names of those firms are not public.

E-mail to: jaredk@njbiz.com
On Twitter: @jaredkaltwasser

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