How a disaster recovery firm pitched itself to North Carolina, years after losing prior contract ...Middle East

A storm-damaged home in western North Carolina. (Photo: North Carolina Department of Commerce HUD CDBG-DR Helene recovery Action Plan)

The firm that will run North Carolina’s Hurricane Helene recovery program in the western mountains, as it sought to win the critical contract, described itself as the only one up to the task.

“Only the HORNE Team has the system, expertise, and experience required to deliver this mission quickly and bring thousands of North Carolinians back home,” wrote one of the firm’s partners to the state.

Mississippi-based Horne LLP won the $81.5 million bid earlier this month. It will implement a $1.4 billion federal housing grant, overseeing an array of other contractors as western North Carolina looks to rebuild from the deadliest storm in state history. Horne’s bid, which won out over four other firms, was first reported by Inside Climate News.

Horne’s successful application for the contract, obtained by NC Newsline through a public records request, details the company’s extensive prior work and contracts: $31.5 million to rebuild in Florida in 2020, and $190 million in Mississippi after Hurricane Katrina.

Mentioned just once in the redacted version of the 350-page plan is the N.C. Office of Recovery and Resiliency, the state office that tapped Horne as prime contractor from 2019 to 2022. The state did not renew the contract amid complaints of poor case management and communication across eastern North Carolina.

Three years later, Horne will once again be at the helm of disaster recovery in the Tar Heel State. And the firm has pledged top-flight customer service, robust in-person staffing and expansive outreach to survivors.

In a hearing Thursday morning, Republican lawmakers said Horne’s return to North Carolina disaster work raised a red flag.

“This is a process that promised to learn from past failures, but it’s already raising some serious concerns,” said House Majority Leader Brenden Jones (R-Columbus), who co-chairs the General Assembly’s committee on hurricane recovery.

A spokesperson for Horne declined to comment, saying the firm was not authorized to speak for the program.

The NC Department of Commerce, which is overseeing the federal grant money and Helene recovery program, provided materials to NC Newsline showing that Horne scored the highest of all bidders in grading by the state’s contract review committee.

Horne’s plan: Local partners, WNC offices & job fairs

The state’s offer with Horne is set to span three years. After that period, the state can choose to re-up the contract for one year, up to six years total.

In the first year, the firm projects the largest cost to be assessing damage and conducting an environmental review. That will cost an estimated $15.6 million. Outreach and intake for survivors and homeowners in the first year is expected to cost around $11 million.

Key to Horne’s outreach plan is partnering with local nonprofits and organizations. Patriot Relief, a North Carolina-based hurricane relief nonprofit, is set to knock on doors and use data tracking to find survivors who may be eligible. And the firm plans to blast out materials online, in local media and even by mail in both English and Spanish.

“Outreach efforts will have intentional focus to reach the unreachable and offer aid to those most in need,” Horne writes in its application.

Among the other local groups Horne has tapped as partners: Endeavors, a Christian crisis care organization with offices in Jacksonville and Fayetteville; and SWCA, an environmental consulting practice with offices in Cary and Charlotte.

The firm plans to set up three offices in western North Carolina — in Boone, Weaverville and Marion. The Marion intake center would remain open for the entire recovery process; Boone and Weaverville offices would be open for at least six months.

Horne plans to source staff locally — outlining a series of three job fairs, including in Buncombe and Watauga counties. The state has required the contractor to have at least 25% of their staff locally hired; Horne wrote that it aims to “hit or surpass 75%.”

Details on how exactly Horne will oversee construction are scant. Portions of its application outlining the timeline, inspections, diagrams, warranties and more have been redacted. But the firm has pledged to work quickly, “without sacrificing the homeowner’s experience in the process.” In the bid, Horne included photos of rebuilt homes in Florida that remained sturdy under two hurricanes.

“Speed is no longer a goal; it is an expectation,” the firm wrote. “When it comes to housing programs, speed is service. We know your homeowners have one goal in mind, and that is to return home as quickly as possible.”

Horne has recently faced legal action in other states over disaster recovery projects. Last month, the company paid $1.2 million in a settlement agreement with the federal government in West Virginia. A spokesperson told Inside Climate News the company had not admitted any wrongdoing.

State officials said Thursday that they learned of the West Virginia settlement after the contract window had closed. Horne provided the state with a copy of the settlement agreement.

Horne taps three veteran employees to lead Helene rebuild

Included in Horne’s application were three top staffers it planned to deploy to lead the Helene project.

Kelly Huck is set to be the program director. Huck, who will be based in Raleigh, is the firm’s director of government services. He previously led a project in Florida using the same federal grant money, serving as construction director after Hurricanes Ian and Michael.

Milena Caterino, who served as a senior manager and deputy construction manager on the Florida contract after Michael, is the proposed construction manager. And Bob Harland, who has served as Horne’s tech director on a number of disaster projects, has been put forward as tech manager. Both would be based in North Carolina.

Gov. Josh Stein’s advisor for western North Carolina, Jonathan Krebs, worked for Horne until April 2024, Inside Climate News reported. Krebs was last paid by the firm in December, the governor’s office said. He was not involved in the review committee and “will not financially benefit from it,” a spokesperson said.

“I do not participate or particularly care who they picked to do the work,” Krebs told state lawmakers Thursday.

Jones, the House majority leader, argued that Krebs’ role in drafting the state solicitation was a “blatant conflict.” Krebs pushed back on that accusation, saying that “recusing myself from that activity would nullify my role.”

Another lawmaker viewed his prior work for the firm as a plus.

“[He could] understand some of their processes, identify red flags,” said Sen. Warren Daniel (R-Caldwell).

How North Carolina graded, awarded Horne

Horne’s bid earned 184 out of 200 possible points from the state’s five-person committee, according to a recommendation memo provided to NC Newsline.

The committee noted the firm’s experience with single-family housing, as well as “glowing references” from South Carolina, Florida and Mississippi. Its technical plan was “well-researched and planned.” And Horne’s recommended leaders were qualified, the committee noted, but lacked experience building housing “in places with characteristics similar to western NC.”

“Horne was by far the best vendor selection,” said Stephanie McGarrah, who is leading the new Commerce division tasked with overseeing Helene operations, on Thursday.

Horne’s price for the contract fell in between the other two bidders, according to the state.

Hunt, Guillot & Associates, LLC, another bidder, earned the next-highest score at 161 points. That firm offered the highest price, at $87.1 million. And it was docked for its lesser experience in specific services, as well as key leaders not relocating to North Carolina.

A third bidder, Tidal Basin, provided the lowest price but had “significant weaknesses” in qualifications. Its recommendations were also lacking — the city of Brunswick, Georgia told the committee “they would not recommend” hiring the group. Tidal Basin earned 140 points.

Two other bidders were deemed non-responsive. McGarrah said Thursday she was “personally very disappointed” that one of those bidders, IEM, did not submit a qualifying offer. They did not provide required financial documents.

“You need to understand, this is a very small group of companies that do this kind of work,” McGarrah said.

The state review committee for the contract included McGarrah, Tommy Clark, the executive director of the NC Pandemic Recovery Office; and Konrad Wisniewski, public information officer for the Department of Commerce.

Allan Sandoval, who is CIO at Commerce, and Mark Poole, who leads the Commerce Finance Center, served as subject matter experts. They did not have voting power.

Asked by Rep. Mark Pless (R-Haywood) whether she would redo the bidding process knowing what she knows now, McGarrah said she would not. The housing process is already expected to take three to four years, she estimated.

“I do think we made the right decision,” she said. “I also think that it just slows the recovery down. It’s slow already. It’s so frustrating.”

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