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DiNapoli to probe price gouging in Sandy work

State Comptroller Thomas P. DiNapoli.

State Comptroller Thomas P. DiNapoli. Photo Credit: Newsday, 2012 / Audrey C. Tiernan

State Comptroller Thomas P. DiNapoli will investigate for evidence of price gouging in bills submitted to New York State for work following superstorm Sandy.

The move comes after a review by the comptroller's staff of six purchase orders that triggered one vendor to cut its price for generators by more than $63,000, DiNapoli said in a statement Thursday.

DiNapoli's staff returned purchase orders to the state Department of Homeland Security and Emergency Services for "adjustment or renegotiation," the statement said.

After Sandy struck Oct. 29, state agencies entered into emergency contracts that didn't require approval of the state comptroller, DiNapoli said.

In normal circumstances, the comptroller's bureau of contracts reviews and approves most contracts greater than $50,000. Due to the emergency, that responsibility was suspended by Gov. Andrew M. Cuomo as part of efforts to speed the disaster response. The suspension remains in place.

According to the comptroller's office, Dynasty Chemical of Albany sold the state four generators for use during the height of the storm recovery for $330,016. The amount billed dropped to $266,519 after the comptroller's office declined the payment requests, requiring the state Department of Homeland Security and Emergency Services to renegotiate the payment.

Three of the four generators were used on Long Island -- to supply power to the Elmont Fire Department, the Town of Hempstead's Animal Shelter and a Long Beach drawbridge. The fourth went to Floyd Bennett Field in Brooklyn, said Kate Gurnett, a spokeswoman for DiNapoli.

Contracts executed under "stressful conditions" may be at increased risk for bid rigging, price gouging and favoritism, the comptroller said.

DiNapoli's review of Sandy-related contracts is the latest in a string of probes of Sandy cleanup contracts.

In Nassau County, District Attorney Kathleen Rice is investigating how contracts were awarded and whether the contractors paid prevailing wages, sources have told Newsday.

Suffolk County District Attorney Thomas Spota subpoenaed records regarding Sandy contracts in five Suffolk towns. Prosecutors are looking through records to see if contractors paid prevailing wages and if Sandy-related contracts were awarded properly under state law, sources have said.

The state attorney general's office, U.S. Department of Labor, state Department of Labor and the Nassau County comptroller's office also are conducting investigations.

State executive law allows the governor to suspend certain laws and regulations if compliance would hinder a timely disaster response.

Under a series of executive orders, the governor suspended the comptroller's review and approval of contracts greater than $50,000 until at least June 23. In fiscal 2011-12, the comptroller's office reviewed 28,400 such transactions totaling $66.5 billion, according to DiNapoli's office.

The governor's executive orders also suspended other sections of state finance law that enable standard procurement processes to be waived by the commissioner of general services, a key state procuring agency, and the commissioner of transportation. Those suspensions remain in effect until June 28.

Representatives from Dynasty Chemical could not be reached for comment Thursday. A request for comment from the governor's office was not returned.

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