ALBANY - State officials have quadrupled payments -- to $55 million -- to a Minnesota company hired through a no-bid, emergency contract to help get superstorm Sandy rebuilding grants to New Yorkers, a Newsday review of records shows.
State officials said they expanded the scope of duties provided by ProSource Technologies of Minneapolis. Originally hired for $13.4 million to coordinate a homeowner buyout program in Staten Island, ProSource is now effectively managing cases for thousands of New Yorkers looking for rebuilding aid.
The expansion of ProSource's work has raised concerns among some rivals looking to compete for the lucrative job of managing the more than $1.7 billion in rebuilding grants New York received from the federal government, a source said.
The state began fielding bids for the job of managing its Community Development Block Grant program over the summer. The bidding closed in August, but no contractor has been selected, records show. The source said some competitors privately wonder whether the bidding process has been shelved, leaving ProSource to take over the rest of the job.
A spokesman for Gov. Andrew M. Cuomo said that's not the case. He said the $55 million covered services ProSource already performed since being hired in May was not a backdoor way of handing the Minnesota firm the contract.
"There is no responsible option but to use a temporary contractor while we go through a full .?.?. [bidding process] because we cannot make Sandy victims wait longer than necessary for needed relief," said Cuomo spokesman Matt Wing.
New York has been under some heat to get aid to homeowners. Newsday recently reported that just four of 4,000 Long Island homeowners who have qualified for aid have received checks. Cuomo officials pointed out that the federal government has made the eligibility screening more rigorous after it found Hurricane Katrina aid being misspent.
Another Cuomo aide said that the state is still weighing bids for the grant-management contract and that the administration is still determining the "precise scope" of services needed. He added that the $55 million is still well below the federal threshold for how much New York can spend on emergency, noncompetitive contracts.
"This is not a case of: we're going with ProSource and the $55 million is a sign of that," said the Cuomo aide.
The state expanded ProSource's portfolio because it was "pleased with their work" on Staten Island, the aide said. The company has hired roughly 400 people to manage cases and established offices in Albany, Staten Island and several on Long Island. State officials said the company is processing aid applications, verifying eligibility, overseeing title and environmental inspections, among other things.
"This whole process, ProSource has been managing," the aide said.
In October, ProSource hired two well-known lobbying firms. It contracted to pay DKC Government Affairs, a unit of Dan Klores Communications, $5,000 per month for representation. It also hired Kasirer Consulting at $4,000 per month.