Russ Zimmer

@RussZimmer

UPDATE: George Martin, CEO of Veteran Call Center, tells the Press that he now retracts his claim that HGI was charging the state an unreasonable amount for his services.

EARLIER: It's been years since Hammerman & Gainer International won, and later lost, contracts to serve superstorm Sandy victims in New Jersey, but questions remain about some of the company's decisions.

The contractor hired to lead the state's housing recovery after Sandy was fired 2½ years ago after less than six months on the job. However, HGI remains locked in litigation here with a subcontractor — one who scored a major win in court this spring — that alleges HGI was overcharging the state.

The claim surfaces in a federal lawsuit in the U.S. District of New Jersey, in which the subcontractor, Veteran Call Center, is suing HGI for breach of contract and underpayment.

HGI's main role was to supervise nine housing recovery centers and to accept and process applications for disaster grants from homeowners. Part of that responsibility included running a call center, and for that it hired VCC, which has its main office in Piscataway.

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In court documents, the call center says it was charging HGI $28.85 per hour per employee who worked in the call center. HGI was then turning around and billing the state for $40 to $200 per hour per employee for the same service, the call center alleges.

A 5 percent to 10 percent mark-up is standard, call center co-founder and CEO George Martin told the Asbury Park Press, but what HGI was charging the state was "out of line."

HGI referred all questions to Robert Mintz, the Louisiana-based contractor's lawyer in New Jersey. He would not comment on the overcharging claims.

HGI is being audited by the U.S. Department of Housing and Urban Development's Office of Inspector General, according to an October 2015 notice obtained by the Press, for "ineligible or non-allowable" charges made during its contract with New Jersey.

A HUD spokesman said a report on the audit is expected to be released next month.

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Martin said that landing the contract, which was worth up to $6 million, was a big get for his business.

“We went out and interviewed about 150 people, hired 75 — 95 percent were minorities, 65 percent were veterans or veterans' spouses," said Martin, a disabled veteran of the Vietnam War. "We said we're on our way, we've got this great opportunity in our home state. Then things went to hell in a handbasket in a hurry.”

All those full-time employees — hired through a staffing agency — would be laid off after HGI was dismissed by the New Jersey Department of Community Affairs, Martin said.

HGI's deal would have expired last month had it not been terminated early for what the state deemed poor performance. Gov. Chris Christie described it as “fundamental disagreements” on how the programs should be run.

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At the time the contract was severed, New Jersey had already paid HGI nearly $36 million. The two sides negotiated a $7.6 million final payment that was meant to cover the outstanding invoices that HGI had submitted for work completed by its subcontractors.

HGI, according to Mintz, proposed to split the money proportionally with its seven subcontractors — with each party getting 26.7 percent of what it's owed. The call center balked, saying that it deserved full payment, which it said was $690,000.

The two companies went to court in August.

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On April 19, U.S. District Court Judge Jose Linares in Newark sided with the call center, but left the matter of precisely how much was owed up to the two parties.

Mintz declined to comment except to say that the call center was alone in disputing how HGI dealt with subcontractors after the Sandy contract was terminated. He also said that the matter may be far from finished, despite a court-ordered settlement conference on June 23.

"The parties are litigating the question of how much is owed to VCC and when the final judgment is reached at that point HGI has the option to appeal," Mintz said.

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Russ Zimmer: 732-557-5748, razimmer@app.com