SEPTA Teams With Contractors Association Of Eastern PA For DBE Matchmaker Event

SEPTA has teamed with the Contractors Association of Eastern Pennsylvania for a networking event which will bring together majority contractors with small, minority-owned, and women-owned construction firms for contracting opportunities on federally-funded public works projects. Attendees will also learn how to do business with PennDOT, PhilaPort, the City of Philadelphia Office of Economic Opportunity, and SEPTA.

The matchmaking event will be held on Wednesday, May 15, 2019, from 8:00 AM – 11:00 AM, at the Sheet Metal Workers Local Union 19, at 1301 S. Christopher Columbus Boulevard, Philadelphia, PA 19147.

A flyer announcing the event can be found here.

The U.S. DOT DBE program is explained here.

If you need assistance with a public contracting issue, feel free to call or email me. I’ll be happy to assist in anyway possible.

Posted on May 8, 2019 by Christopher I. McCabe, Esq. in DBE/MBE/WBE, SEPTA Comments Off

Pennsylvania Initiates Disparity Study For Small Diverse Business Program

In June 2017, the Commonwealth of Pennsylvania initiated a disparity study that will provide information to help the Department of General Services (DGS) implement the Pennsylvania’s Small Diverse Business Program. The expected completion date for the disparity study is September 2018.

The study will include analyses of the participation of minority-, women-, disabled-, veteran-, and LGBT-owned businesses in prime contracts and subcontracts awarded by DGS during the period from July 1, 2011, through June 30, 2016.

DGS has created a webpage highlighting the disparity study, with materials and a description of study team members.

The materials presented at the disparity study’s kickoff meeting can be found here.

An FAQ on the disparity study can be found here.

Posted on August 17, 2017 by Christopher I. McCabe, Esq. in Com. of Pa., DBE/MBE/WBE, DGS Comments Off

The U.S. DOT Disadvantaged Business Enterprise (DBE) Program

I have posted on numerous occasions about the U.S. Department of Transportation’s disadvantaged business enterprise (DBE) program. The DBE program is especially relevant to public contractors and subcontractors performing work for PennDOT, SEPTA, the Philadelphia International Airport, the Philadelphia Streets Department, the Port Authority of Allegheny County, and other public entities in Pennsylvania that are managing projects funded with federal transportation dollars.

In this post, I’ll provide some limited background information and links about the DBE program and how the program operates and what rules and regulations apply.

Posted on April 5, 2016 by Christopher I. McCabe, Esq. in DBE/MBE/WBE Comments Off

DBE Pass-Through Scheme Alleged On PennDOT Platt Bridge Project In Phila.

According to a criminal information filed in the U.S. District Court for the Eastern District of Pennsylvania, still another fraud scheme involving the U.S. Department of Transportation’s disadvantaged business enterprise (DBE) Program has been uncovered, this time on the federally-funded George C. Platt Memorial Bridge project in Philadelphia.

In April 2011, PennDOT awarded a $42.7M contract to perform structural steel painting and repairs on the Platt Bridge to a joint venture consisting of Hercules Painting Company, Inc., of New Castle, Pa., and Vimas Painting Company, Inc., of Lowellville, Ohio. During the bid process, the Hercules-Vimas JV allegedly committed to subcontract $3.1M in DBE work to Vertech International, Inc., to supply paint materials for the project. Instead, the Hercules-Vimas JV allegedly negotiated contracts and ordered materials for the Platt Bridge project directly with non-DBE suppliers, with Vertech allegedly acting as a pass-through to give the appearance that DBE requirements had been satisfied. PennDOT awarded approximately $1.97M in DBE credit to the Hercules-Vimas JV. Vertech was allegedly paid 1.75% of the face value of the invoices it processed to act as a pass-through.

Posted on March 17, 2016 by Christopher I. McCabe, Esq. in DBE/MBE/WBE, PennDOT Comments Off

DBE Pass-Through Scheme Alleged On Two PennDOT Bridge Projects In Phila.

According to a criminal information filed in the U.S. District Court for the Eastern District of Pennsylvania, still another fraud scheme involving the U.S. Department of Transportation’s disadvantaged business enterprise (DBE) Program has been uncovered on two different federally-funded projects in Philadelphia.

In September 2009, PennDOT awarded a $70.3M contract to a tri-venture consisting of a Philadelphia-based highway contractor, Alpha Painting & Construction Co., Inc., of Baltimore, and Liberty Maintenance, Inc., of Campbell, Ohio, to perform structural steel painting and repairs, and concrete repairs, on the I-95 Girard Point Bridge in Philadelphia. As part of the contract, the tri-venture committed to subcontract $4.7M of work to Markias, a now-defunct certified DBE, to supply materials for use on the the contract. Alpha and Liberty formed a joint venture and allegedly ordered the needed materials directly from non-DBE suppliers, and allegedly used Markias as a pass-through to give the appearance that the DBE requirements had been satisfied. PennDOT awarded approximately $3.26M in DBE credit to the tri-venture based on the DBE work allegedly performed by Markias.

Posted on March 3, 2016 by Christopher I. McCabe, Esq. in DBE/MBE/WBE, PennDOT Comments Off

Pennsylvania Steel Erector Indicted In DBE Pass-Through Scheme And Suspended On Federally Funded Contracts

If you are a prime contractor working on federally-funded transportation projects, beware of fraud involving the U.S. Department of Transportation’s disadvantaged business enterprise (DBE) program. A recently exposed “pass-through” scheme involving $27 million in federally-funded contracts scheme was engineered together by subcontractor Century Steel Erectors Co., and WMCC, Inc., a certified DBE.

Posted on February 25, 2016 by Christopher I. McCabe, Esq. in DBE/MBE/WBE, PennDOT Comments Off

DBE Fraud Guilty Pleas Result In Sentences Of Probation And Restitution Of $1.3 Million

In my post from yesterday, found here, I reported on the DBE “pass-through” fraud scheme engineered by Carl M. Weber Steel Service, Inc., and Karen Construction, Inc.

On January 11, 2016, Dennis and Dale Weber, the owners of Weber Steel, were each sentenced to six months’ home confinement and five years’ probation, and Weber Steel was placed on three years’ probation. All three were also ordered to jointly pay $1 million in restitution to the Federal Highway Administration (FHWA).

On February 3, 2016, Judy Noll, the owner of Karen, was sentenced to three years’ probation and ordered to separately pay $336,219 in restitution to FHWA.

The U.S. Department of Transportation’s Office of Inspector General press release on the sentencing can be found here.

Posted on February 12, 2016 by Christopher I. McCabe, Esq. in DBE/MBE/WBE Comments Off

Four Plead Guilty In Fraud Scheme To Obtain $18.7 Million In DBE Subcontracts On PennDOT Projects

Still another “pass-through” fraud scheme involving the U.S. Department of Transportation’s disadvantaged business enterprise (DBE) program has been exposed, with criminal penalties for all involved.

On October 8, 2015, Dennis Weber, Dale Weber, Carl M. Weber Steel Service, Inc., and Judy Noll pleaded guilty to federal conspiracy charges related to a complex DBE fraud scheme that, incredibly, lasted for more than 16 years, totaled almost $19 million, and involved 224 bridge projects throughout Pennsylvania.

Posted on February 11, 2016 by Christopher I. McCabe, Esq. in DBE/MBE/WBE, PennDOT Comments Off

Gov. Tom Wolf Signs Executive Order To Improve Participation Of Small & Diverse Businesses

On September 23, 2015, Pennsylvania Governor Tom Wolf signed an Executive Order solidifying his commitment to improving the participation of minority-owned, women-owned, LGBT-owned, veteran-owned, and disabled-owned businesses in state government contracting.

According to the official press release, Executive Order 2015-11, entitled “Diversity, Inclusion, and Small Business Opportunities in State Contracting and Pennsylvania’s Economy,”

directs a consistent and coordinated effort to ensure diversity and inclusion in all contracting opportunities for small and diverse businesses throughout agencies under the governor’s jurisdiction and promotes the creation of programs to better prepare those businesses to compete and succeed in Pennsylvania’s economy.

Posted on November 12, 2015 by Christopher I. McCabe, Esq. in DBE/MBE/WBE, DGS Comments Off

Schuylkill Products Officers Sentenced To Prison And Ordered To Pay Restitution Of $119 Million For DBE Fraud

In the criminal fraud case involving Schuylkill Products, Inc., and the U.S. Department of Transportation’s Disadvantaged Business Enterprise (DBE) program (see my earlier post here about this case), the former Schuylkill Products vice presidents in charge of sales and marketing and field operations received lengthy prison sentences and were ordered to pay restitution of $119 million.

The official press release on the sentencing can be found here. This is from the press release:

“The sentences handed down today, in what is the largest reported DBE fraud case in USDOT history, serve as clear signals that severe penalties await those who would attempt to subvert USDOT laws and regulations,” said Doug Shoemaker, OIG Regional Special Agent in Charge. “Preventing and detecting DBE fraud are priorities for the Secretary of Transportation and the USDOT Office of Inspector General. Prime contractors and subcontractors are cautioned not to engage in fraudulent DBE activity and are encouraged to report any suspected DBE fraud to the USDOT-OIG. Our agents will continue to work with the Secretary of Transportation; the administrators of the Federal Highway, Transit, and Aviation Administrations; and our law enforcement and prosecutorial colleagues to expose and shut down DBE fraud schemes throughout Pennsylvania and the United States.”

According to U.S. Attorney Peter J. Smith, the DBE fraud lasted for over 15 years and involved over $136 million in government contracts in Pennsylvania alone. SPI, using Marikina as a front, operated in several other states in the Mid-Atlantic and New England regions. Although Marikina received the contracts on paper, all the work was really performed by SPI personnel, and SPI received all the profits. In exchange for letting SPI use its name and DBE status, Marikina was paid a small fixed-fee set by SPI.

This latest news is just more proof, if any was ever needed, that DBE fraud does not pay. Contractors working on federally-funded highway projects should be especially wary of trying to sidestep the strict DBE rules that govern such projects. Doing so, as shown by these sentences, can have serious and life-altering consequences.

If you are a contractor working on a federally-funded highway project, and have questions concenrning the US DOT DBE program, feel free to contact me. I’ll be happy to answer any questions you have.