The City of Philadelphia has issued a Request for Proposals (RFP) to implement a reverse auction bidding procedure for the purchase of certain supplies, equipment, services, and concessions in lieu of ordinary, sealed paper bids.
In a reverse auction bidding, sellers compete with each other, in a dynamic, real time environment, until the lowest price is reached, thereby accruing to the buyer – here the City of Phila. – potential savings that might otherwise not be achieved with traditional, one-time paper bid submissions.
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.
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.
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.
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.