Ashbritt KURDZUK jan2013.JPG

bulldozer contracted by AshBritt, Inc. piles debris in a temporary dump at the base of the Rt. 37 bridge in Seaside Heights in January 2012. A federal audit released Thursday concludes the Christie administration did not violate any rules in awarding a no-bid contract to the politically connected company to haul away debris left by Hurricane Sandy.

(Tony Kurdzuk/The Star-Ledger)

TRENTON — A federal audit released Thursday concludes that Gov. Chris Christie's administration did not violate any rules in awarding a no-bid contract to a politically connected company to haul away debris left by Hurricane Sandy.

But the audit by the Department of Homeland Security's inspector general also said municipalities that contracted with the firm — AshBritt Inc. of Pompano Beach, Fla. — beyond a 60-day emergency period in the immediate aftermath of the storm might have violated federal guidelines.

The Federal Emergency Management Agency agreed to reimburse the state and towns for much of the money spent on debris removal.

"Therefore, FEMA should review each local municipality’s debris removal contracting process and make a determination on the eligibility of costs on a case-by-case basis," the report says.

That raises the specter of towns not receiving much-needed funds promised by the agency. Numerous towns relied on AshBritt past Jan. 3, 2013, when the 60-day emergency period ended. The agency said it would indeed look into its reimbursements in light of the audit.

"FEMA will review the circumstances of the extension," said Edward Neafsey, a spokesman for the agency. "FEMA has reimbursed applicants using an AshBritt contract for debris removal conducted beyond January 3, 2013."

Christie’s office was quick to cite the report Thursday as vindication of how it handled the AshBritt contract, awarded without competitive bidding and offered to towns by well-connected political operatives.

A spokesman for the governor said Democrats were wrong to criticize the administration in what he called "a rush to judgment."

"At the time, many Democrats (with complicit members of the media) jumped on this AshBritt news as some sort of breaking scandal," read an email from the spokesman, Kevin Roberts.

But the audit by the Department of Homeland SecurityâÂÂs inspector general also said municipalities that relied on the contractor âÂÂ Florida-based AshBritt Inc. âÂÂ past a 60-day emergency period may have violated guidelines from the Federal Emergency Management Agency.

Then referring to the scandals that the governor’s office is now fending off, Roberts said: "Led by some of the same partisan Democrats that are attempting to politicize various issues today, a feeding frenzy ensued. Now, with the release of this independent third-party report from the IG, we learn that the partisans were wrong."

But Senate President Stephen Sweeney (D-Gloucester) said in a statement that the audit still showed that a company with a no-bid contract made a lot of money after the storm.

"I stand by what I said last year: While companies like AshBritt, and now HGI, and URS continue to reap the benefits of the storm, middle-class families in New Jersey continue to bear the burden," Sweeney said.

HGI and URS are two other companies involved in the storm cleanup that have come under scrutiny.

FEMA had initially warned the administration that relying on a no-bid contract, especially over an extended period, could jeopardize federal reimbursements. But according to the audit report released Thursday, the agency signed off on the state’s use of AshBritt during the 60-day emergency period.

The inspector general for Homeland Security, which FEMA falls under, conducts thousands of investigations each year that often force towns to return federal dollars.

The Christie administration did not use AshBritt to clear state roads, but the contract allowed 53 municipalities to hire the firm without bidding.

"The contract provided an extremely cost-effective option for towns from a proven, experienced company who got the job done while ensuring FEMA reimbursement," Roberts said.

Christie has said that on the advice of former Gov. Haley Barbour of Mississippi, he awarded AshBritt a contract two days after Sandy struck on Oct. 29, 2012. Barbour is a founding partner in a lobbying firm that has represented AshBritt’s interests in Washington.

New Jersey based its agreement with AshBritt on a 2008 contract the company had with Connecticut. Although FEMA discourages the use of such "piggybacked" contracts, the audit did not take issue with it.

"New Jersey complied with applicable federal and state procurement standards when procuring emergency contracts for statewide debris removal and monitoring activities related to Hurricane Sandy," the report found.

It took the state about 90 days to competitively bid the work, awarding new contracts to four firms, including AshBritt, which offered the highest rates.

FEMA told the state last May that it would only reimburse eligible cleanup costs for work performed and billed under the no-bid contract if it fell into the 60-day period.

In Ocean County, 17 municipalities took advantage of the state’s contract with AshBritt using a shared service agreement through the county, County Administrator Carl Block said.

But Block said he was never told of a 60-day deadline for local governments to go out to bid on contracts, and added that he wasn’t too concerned about the audit.

"FEMA has been all over the map, and if there’s one thing I have sensed about them, if they are going to give you a problem with something, you know about it and have time to work through it," Block said. "I don’t see us having a problem with getting our money back. Call me naïve."

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