NY AG Secures Settlement from Contractor Who Faked Diversity Metrics

• Whistleblower News.

The Office of the Attorney General of the State of New York (“NY AG”) announced a settlement with Rochester-based contractor Bell Mechanical Contractor, Inc. (“Bell Mechanical”), after the company falsely claimed to meet state diversity requirements to win and maintain contracts on a $1.2 billion school modernization project in the city of Rochester.  The settlement requires Bell Mechanical to pay $200,000 in monetary restitution.

In 2007, the State of New York enacted the Rochester Schools Modernization Program (“RSMP”), a three-phase program to rehabilitate deteriorating schools that is estimated to cost $1.2 billion—making it the largest public project in Rochester’s history.  In establishing the RSMP, the State required that any contractors working on the project meet certain minimum diversity requirements, including the requirement that contractors utilize Minority Business Enterprises (“MBEs”) and Women Business Enterprises (“WBEs”), collectively known as Eligible Business Enterprises (“EBEs”), as subcontractors.

In 2012 and 2013, Bell Mechanical was awarded three contracts to perform mechanical work in connection with the RSMP.  As part of those contracts, Bell Mechanical certified it would comply with the RSMP’s diversity requirements.  According to the NY AG, however, Bell Mechanical did not comply with those requirements.  Instead, Bell Mechanical engaged in “labor pass-throughs,” whereby it would hire non-EBEs to perform work but then run the money and paperwork through EBEs to create the appearance that an EBE had performed the labor.  In so doing, the NY AG alleged that Bell Mechanical misused taxpayer money and deprived a legitimate EBE of the opportunity to perform work on a legitimate subcontract.

The NY AG’s investigation into Bell Mechanical arose after a whistleblower filed a qui tam action pursuant to the New York False Claims Act.

Read the press release here.  

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