Philadelphia Prison Contractor Fined $1.85M for Evading Minority Contracting Rules

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The City of Philadelphia has once again taken enforcement action against a City contractor for a violation of the City’s minority contracting rules.  The City’s inspector general conducted an investigation of Prison Health Services, the City’s contractor for prison health care services, and charged the contractor with using a woman-owned firm as a mere pass-through entity in order to satisfy the City’s minority contracting rules.  Prison Health Services agreed in a settlement to a fine of $1.85 million.

The City’s inspector general, Amy Kurland, was quoted in the Philadelphia Inquirer as follows:

“In reality, that company did nothing except give its name to Prison Health Services so Prison Health Services could get the contract,” she said.

Mayor Nutter had even harsher words:

Mayor Nutter called the PHS settlement “a significant moment that sends a very, very strong message to everyone who does business with the city.”  “If you engage in inappropriate or illegal activities,” Nutter said, “we will find you and root you out.”

The settlement with the contractor was the third such enforcement action taken since May 2011, when the City debarred a contractor for violation of minority contracting rules on work at the Philadelphia International Airport.  My post regarding the City’s prior enforcement actions can be found here.  The Philadelphia Inquirer article on the City’s enforcement action can be found here.

If you are a City contractor and you think you can evade the City’s contracting requirements, think again!  You will get caught eventually, and you will likely pay a hefty price.  Don’t make that mistake.  Get advice before you proceed down a path of no return.

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Posted on by Christopher I. McCabe, Esq. in City of Phila., DBE/MBE/WBE, Phila. Inspector General Leave a comment