FEMA Contractors are Charging Steep Markups in Puerto Rico
FEMA is spending $1.2 billion to repair homes in Puerto Rico damaged by Hurricane Maria, but more than 60% of it is going to contractors charging steep markups, according to the NYT. According to invoices and contracts, homeowners who were approved for up to $20K each in aid, in nearly every case, received less than half of what they were approved for. Why? Because layers of contractors and middlemen took the rest. Some of the markups included generators at a cost of $3,700 each. The 5,500-watt portable devices and supplies they came with cost the contractors about $800 each. FEMA also paid $666 apiece for new bathroom sinks, but the contractors who actually bought and installed them paid $260 apiece. FEMA paid almost $4 a square foot to repair roofs; the work was done by subcontractors for $1.64 a foot. In addition to the pricing issues, there were also widespread complaints of long waits and shoddy work. Michael Byrne, FEMA’s Federal Coordinating Officer for Puerto Rico, said the housing department had done an impressive job of getting homes repaired quickly for people who had nowhere else to turn. “By the end of November, I fully expect them to have repaired about 120,000 homes,” Byrne said. “That’s pretty impressive.” More here.