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Mon Nov 26, 2018, 11:56 AM

$3,700 Generators and $666 Sinks: FEMA Contractors Charged Steep Markups on Puerto Rico Repairs

Source: New York Times

$3,700 Generators and $666 Sinks: FEMA Contractors Charged Steep Markups on Puerto Rico Repairs

FEMA is spending more than $1 billion on emergency repairs to homes in Puerto Rico damaged by Hurricane Maria, but much of it is going to contractors charging steep markups and overhead.

By Frances Robles
Nov. 26, 2018

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Extravagant markups, overhead and multiple levels of middlemen have helped lead to huge costs in the FEMA-financed repair program. Known as Tu Hogar Renace — Your Home Reborn — the program is spending $1.2 billion in Puerto Rico to repair up to 120,000 homes.

More than 60 percent of what FEMA is spending in the program, the largest emergency housing program in the agency’s history, is not paying for roofs, windows or doors, The New York Times found in a review of its expenditures. Instead, it is going toward overhead, profit and steep markups.

Homeowners, who were approved for up to $20,000 each in aid, in nearly every case received less than half of what they were approved for, while layers of contractors and middlemen took the rest, a review of hundreds of invoices and contracts associated with the program shows.

The significant costs of transportation, warehousing, insurance and other services that are built into the prices for repairs are not unusual for FEMA disaster relief programs, which reflect the substantial expense of operating in disaster zones. But in Puerto Rico those costs were often so much greater than what would have been possible if homeowners had done the work themselves that they caused a public uproar.

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Read more: https://www.nytimes.com/2018/11/26/us/fema-puerto-rico-housing-repairs-maria.html

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