Georgia Tech Procurement Assistance Center

New NTSB report on FIU bridge collapse stops shy of naming a culprit

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Mar. 15, 2018 bridge collapse in Miami Florida. (Photo: Florida International University)

On Aug. 9, the National Transportation Safety Board released the latest update on its investigation into the March 15 Florida International University pedestrian bridge collapse. It still, however, isn’t ready to identify the probable cause of the structure’s failure despite photo evidence of cracks — some fissure-like — in the bridge deck and other areas, presumably that developed after the prefabricated span was set in place just a few days before the fatal incident.

The bridge was transported into position from its offsite location on March 10 to much fanfare, while its building method, accelerated bridge construction, was touted as a way to deliver such structures with minimal interruption to traffic. Five days later, the bridge collapsed onto vehicular traffic below, killing six — one bridge worker and five vehicle occupants — and injuring several others.

The collapse occurred while workers were tightening, or re-tensioning, steel rods at the bridge’s north end, including at diagonal member 11, after they were de-tensioned on the day of the move.

Keep reading this article at: https://www.constructiondive.com/news/new-ntsb-report-on-fiu-bridge-collapse-stops-shy-of-naming-a-culprit/530346/

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3 charged in fraud scheme involving small business contracts

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Last week in Wisconsin, three defendants agreed to plead guilty to federal crimes related to a long-term fraud scheme led by Brian L. Ganos involving government-funded contracts intended to benefit small businesses.

The three defendants are James E. Hubbell of Sussex, WI, Jorge Lopez of Worthington, Minnesota, and Telemachos Agoudemos  of Big Bend, WI.

According to the charges, the scheme involved Ganos, Hubbell, and others operating construction companies with straw owners who qualified as a disadvantaged individual or as a service-disabled veteran, but who did not actually control the companies.  The scheme participants fraudulently obtained small business program certifications to win millions of dollars in government-funded contracts to which they were not entitled.  Specifically, the following is alleged:

  • Nuvo Construction Company, Inc. (Nuvo”) was misrepresented to be majority-owned and controlled by Lopez to obtain certifications as a Small Disadvantaged Business from the U.S. Small Business Administration and as a Disadvantaged Business Enterprise from Milwaukee County.  In reality, Lopez worked full-time for a different entity in Minnesota and did not actually control Nuvo.
  • C3T, Inc. was misrepresented to be majority owned and controlled by Agoudemos to obtain verification as a Service-Disabled Veteran-Owned Small Business.  In reality, for long stretches, Agoudemos had virtually no involvement in C3T.

Hubbell and Lopez agreed to plead guilty to conspiring to defraud the United States by virtue of the scheme in violation of 18 U.S.C. § 371.  Agoudemos agreed to plead guilty to making false statements to federal agents in order to conceal that C3T, Inc. did not qualify as a Service-Disabled Veteran-Owned Small Business in violation of 18 U.S.C. § 1001.  The maximum penalties for these offenses is five years in prison and a $250,000 fine.

Earlier this month, on April 3, 2018, charges were filed against four defendants in two cases that are related to the April 18 charges.  (See: http://gtpac.org/?p=14290.) 

  • First, in Case No. 18-CR-62, an indictment was filed charging Brian L. Ganos of Muskego and Mark F. Spindler of Menomonee Falls, and the business Sonag Company, Inc. with crimes related to the fraud scheme.  The indictment also alleged that Ganos engaged in money laundering with proceeds from the scheme. The indictment included a forfeiture notice indicating that the United States seeks to forfeit a condominium located in Winter Park, Colorado; the office building used by the companies at 5500-5510 West Florist Avenue, Milwaukee, Wisconsin; a 2014 Chevrolet Corvette Stingray Convertible; and more than $2.2 million seized from two bank accounts.  Each of those assets is subject to civil forfeiture actions filed by the United States.
  • Second, in Case No. 18-CR-64, Nicholas Rivecca agreed to plead guilty to an Information charging him with conspiring with Ganos and others to use Nuvo’s DBE status to win government-funded concrete orders.  Rivecca and Ganos were the co-owners of Sonag Ready Mix, LLC, which is alleged to have filled the concrete orders in Nuvo’s name.

The following agencies are participating in the investigation that led to these charges: the Federal Bureau of Investigation; U.S. General Services Administration, Office of Inspector General; Department of Veterans Affairs, Office of Inspector General; Department of Defense, Office of the Inspector General, Defense Criminal Investigative Service; U.S. Department of Transportation, Office of Inspector General; U.S. Small Business Administration, Office of Inspector General, Investigations Division; Defense Contract Audit Agency; and U.S. Army Criminal Investigations Command Major Procurement Fraud Unit.

Source: https://www.justice.gov/usao-edwi/pr/three-more-defendants-charged-fraud-scheme-involving-small-business-contracts

Infrastructure projects should include more minority- and women-owned contractors

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The need to rebuild, repair, operate and maintain our country’s infrastructure is, and always will be, an ongoing endeavor. The problem is that minorities, women, veterans and other groups are seldom the contractors or high-wage earners on infrastructure projects.

Historically, the primary funding source for the U.S. Dept. of Transportation and its infrastructure projects is an 18.4¢-per-gallon gasoline tax and a 24.4¢-per-gallon tax on diesel fuel that millions of consumers pay at the pump. These taxes account for nearly $200 billion annually. In addition to the federal tax, states collect gasoline taxes that often are much higher, with some state rates adding as much as 57¢ per gallon to a fuel purchase. Couple these taxes with airport fees, tolls and so on, and we see that much of America’s infrastructure is supported by consumers—people who should have the right to participate in rebuilding it. The inclusion of all Americans must be a top priority for local, state and federal representatives and the companies awarded these contracts.

As financial models for these projects become more creative, including the wider use of public-private partnerships (P3s), we need to ensure that funds are being used for their intended purpose—to rebuild infrastructure—and that all Americans benefit from this funding.

Keep reading this article at: https://www.enr.com/articles/44181-infrastructure-projects-should-include-more-minority–and-women-owned-contractors

Two companies and individuals indicted for exploiting disadvantaged business program

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Stamatios “Tom” Kousisis of Pennsylvania and Emanouel “Manny” Frangos of Ohio, along with Alpha Painting & Construction Co., Inc. of Baltimore, Maryland, and Liberty Maintenance, Inc. of Youngstown, Ohio were charged last week with conspiracy to commit wire fraud, wire fraud, and making false statements in a scheme involving the U.S. Dept. of Transportation’s Disadvantaged Business Program (DBE) in connection with Pennsylvania’s federally-funded Girard Point Bridge project and the federally-funded 30th Street Station.

Kousisis is the Project Manager of Alpha and Frangos is an owner of Liberty Maintenance, which are both bridge painting contractors, although neither is a certified DBE in Pennsylvania.  The alleged scheme involved Alpha-Liberty JV, a joint venture between defendants Liberty Maintenance and Alpha Painting, and Markias, Inc., a now-defunct certified DBE.

In September 2009, PENNDOT awarded a contract for approximately $70.3M to a triventure that included the Alpha-Liberty JV to perform structural steel painting and repairs, and concrete repairs, on the Girard Point Bridge in Philadelphia.  As part of that award, the triventure made a commitment to PENNDOT to subcontract approximately $4.7M in DBE work to Markias to supply materials to be used in performing the contract.  Under governing law, the Alpha-Liberty joint venture was only entitled to credit for work performed by a DBE that was performing a commercially useful function.  Instead, according to the indictment, the Alpha-Liberty JV and Kousisis ordered materials needed for their work on the Girard Point Project directly from suppliers that were not DBEs, and used Markias as a mere pass-through or front, to make it falsely appear that disadvantaged business enterprise requirements had been met on the Girard Point Project when those requirements had in fact not been met.  Markias did not perform a commercially useful function.

In December 2010, PENNDOT awarded a contract for approximately $50.8 million to a joint venture of two companies referred to in the indictment as Company C and Company F, to perform structural steel painting and repairs and roadway reconstruction beneath and around AMTRAK’s 30th Street Train Station in Philadelphia.  Company C and Company F entered into a subcontract, for approximately $15 million, for the Alpha-Liberty JV to perform the structural steel painting beneath 30th Street Station.  As part of the bid process, Company C and Company F committed to subcontract approximately $1.7M in Disadvantaged Business work to Markias to supply paint materials for the 30th Street Project.  Instead, according to the indictment, the Alpha-Liberty JV and Kousisis ordered materials needed for their work on the 30th Station Project directly from suppliers that were not DBEs, and used Markias as a mere pass-through or front, to make it falsely appear that the DBE requirements had been met on the 30th Station Project when those requirements had in fact not been met.  Markias did not perform a commercially useful function.

In addition, the indictment alleges that the Alpha-Liberty JV and Kousisis, and Frangos ordered materials to be delivered to and used on out-of-state projects while directing that the purchase invoices be sent to Markias in New Jersey.  Then, allegedly at the direction of Alpha-Liberty JV and Kousisis, and Frangos, Markias issued invoices that made it falsely appear that those supplies had been used on the Girard Point and 30th Street Projects in Pennsylvania.  Alpha-Liberty JV and Kousisis, and Frangos allegedly caused Company C to falsely report to PENNDOT that the supplies delivered to and used on the out-of-state projects qualified for DBE credit in Pennsylvania when those purchases did not so qualify.  PENNDOT awarded approximately $3.26 million in DBE credit to for the Girard Point Project and approximately $1.275 million in DBE credit for the 30th Street Station Project based on DBE work supposedly performed by a disadvantaged business (Markias). Alpha-Liberty JV paid Markias 2.25% of the face value of the invoices processed by Markias allegedly to act as a pass-through.

If convicted the defendants face a statutory maximum sentence of 170 years in prison, a possible fine, supervised release, and a $1,600 special assessment.

The case was investigated by the U.S. Department of Transportation Office of Inspector General, the FBI, the Department of Labor Office of Inspector General, and Amtrak Office of Inspector General.

An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.

Source: https://www.justice.gov/usao-edpa/pr/charges-allege-two-individuals-and-their-companies-exploited-usdot-disadvantaged

Multiple defendants charged with 22 counts of fraud and money laundering involving $200 million in small business contracts

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A federal grand jury returned a twenty-two count indictment on April 3rd, charging three defendants with a 12-year fraud and money laundering scheme involving over $200 million in government-funded contracts intended to benefit small businesses.

The indictment names two individuals, Brian L. Ganos and Mark F. Spindler, both of Wisconsin, and the business Sonag Company, Inc. as defendants.  In a related case, Nicholas Rivecca, Sr., also of Wisconsin, agreed to plead guilty to conspiring to defraud the United States.

The indicted defendants are charged with a conspiracy to commit mail fraud and wire fraud.  The alleged conspiracy involves operating construction companies with straw owners who qualified as a disadvantaged individual or as a service-disabled veteran, but who did not actually control the companies.  The conspirators then fraudulently obtained small business program certifications to win government-funded contracts to which they were not entitled.

Specifically, court documents allege the following:

  • Nuvo Construction Company, Inc., was misrepresented in order to obtain certifications as a Small Disadvantaged Business from the U.S. Small Business Administration (SBA) and as a Disadvantaged Business Enterprise (DBE) from Milwaukee County.  However, the disadvantaged owner worked full-time for a different entity in Minnesota and did not actually control Nuvo.
  • C3T, Inc. was misrepresented to be majority owned and controlled by another individual to obtain verification as a Service-Disabled Veteran-Owned Small Business.  In reality, for long stretches, the “owner” had virtually no involvement in C3T.
  • Pagasa Construction Company, Inc. was misrepresented to be majority owned and controlled by a third disadvantaged individual in order to obtain certification as a Small Disadvantaged Business from the SBA.  In reality, the owner relied on the assistance of conspirators to form Pagasa.

The federal indictment alleges that the defendants used their certifications to obtain over $200 million in federal, state, and local contract payments.  These included federal construction contracts that were set aside for Small Disadvantaged Businesses or Service-Disabled Veteran-Owned Small Businesses.  The indictment also alleges that the scheme included using Nuvo’s DBE certification to win ready-mix concrete contracts based on the false representation that Nuvo provided ready-mix concrete independently when, in truth, Nuvo’s concrete operations depended heavily on Sonag Ready Mix.  As a part owner of Sonag Ready Mix, Nicholas Rivecca, Sr. agreed to plead guilty to that portion of the scheme.

The government alleges that the conspirators engaged in efforts to conceal the scheme and obstruct investigations into the matter; when interviewed, Ganos and Spindler each gave materially false statements to federal agents.

The indictment also alleges that Ganos conspired with Sonag Company, Inc. and others to launder proceeds of the fraud scheme in order to disguise and conceal the nature, source, and location of those fraud proceeds.  As a part of that conspiracy, Ganos is alleged to have transferred fraud proceeds from accounts of Nuvo and C3T to accounts that Ganos controlled.  The indictment further charged Ganos with three counts of concealment money laundering transactions, one of which involved the purchase of a Corvette with proceeds of the fraud scheme, and seven counts of spending money laundering transactions.

The maximum penalties for each of the wire and mail fraud-related charges are 20 years in prison, a $250,000 fine, and forfeiture of criminal proceeds.  The maximum term of imprisonment for conspiring to defraud the United States is five years.  The maximum term of imprisonment for the money laundering conspiracy and for each of the three concealment money laundering charges is 20 years in prison.  The maximum term of imprisonment for each of the seven spending laundering charges is 10 years in prison.  Each of the 11 money laundering charge also carries a fine of up to $250,000 or twice the amount laundered and subjects the defendant to forfeiture of all money and property involved in the laundering transaction.

Assets of the defendants — including real property, a 2014 Chevrolet Corvette Stingray Convertible, and more than $2.2 million seized from two bank accounts — are subject to civil forfeiture actions filed by the federal government.

The following agencies are participating in this investigation: the Federal Bureau of Investigation; U.S. General Services Administration, Office of Inspector General; Department of Veterans Affairs, Office of Inspector General; Department of Defense, Office of the Inspector General, Defense Criminal Investigative Service; U.S. Department of Transportation, Office of Inspector General; U.S. Small Business Administration, Office of Inspector General, Investigations Division; Defense Contract Audit Agency; and the U.S. Army Criminal Investigations Command Major Procurement Fraud Unit.

An indictment is only a charge and not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.

Source: https://www.justice.gov/usao-edwi/pr/multiple-defandants-charged-fraud-and-money-laundering-scheme-involving-over-200

Transit supply chain forum to be held Oct. 11th

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On Wednesday, Oct. 11, 2017, a Transit Industry Supply Chain Connectivity Forum is being held for the purpose of bringing large transit original equipment manufacturers (OEMs) together with smaller, qualified and interested U.S. manufacturers in an effort to facilitate the use of a higher percentage of domestic suppliers in transit products and systems.

The Forum offers a venue for smaller manufacturers to learn what products are needed and find out more about investments they need to consider when entering the transit industry.

As part of the Forum, time will be allocated for ten-minute introductory, private meetings between participating OEMs and prospective suppliers. Participating suppliers can include both current transit industry suppliers, and potential new suppliers.

OEMs currently confirmed to participate include: Alexander Dennis, Kiepe Electric Inc., Siemens, and United Rail, Inc.   Others may be added at a later date.

Some of the products the OEMs will be sourcing include:  Wiring Harnesses, Driver’s Display, Wiper System, Variable Frequency Drives, DC-DC Converter, Switches, Suspension Components, Steering Column, Brakes & Brake Valves, Brake Pedals, Stanchions, Overhead Lighting Panels, Flooring, Passenger and Drivers Seating, Destination Signs, ADA Ramp, HVAC Systems, Bike Rack, Fire Suppression, High and Low Voltage Cable, Connectors, Terminals, Plugs, Sensors, Lugs, Relays, Latches, Hinges, Springs Filters, Headlights, Paint, and Design Services.

This event is held in conjunction with the American Public Transportation Association’s (APTA) Annual Meeting and Expo, October 8-11, 2017 which will take place in the Georgia World Congress Center, Building C, Rooms C205 & C206, in Atlanta, Georgia.

Partners for this event include the National Institute of Standards in Technology (NIST), Georgia Manufacturing Extension Partnership (GaMEP), and the Federal Transit Administration (FTA).

The Forum will be held between the hours of 8:00 am and 5:00 pm.  There is a $25 registration fee, and breakfast and lunch will be provided.  Register at: http://ow.ly/KIW730fpvpe

Questions?  Contact Tim Israel, GaMEP Associate Director, at Tim.Israel@innovate.gatech.edu or 770-354-3809.

An infrastructure deal should be easy, but isn’t

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The stars should be aligned for a big infrastructure deal.

The lingering devastation from the hurricanes that crippled Houston and Florida underscored the national problems of crumbling roads and bridges, inadequate transportation systems and aging electrical grids. President Donald Trump and congressional Democrats both want Washington to spend billions on repairs and construction.

The need is critical. The American Society of Civil Engineers recently gave the country’s infrastructure a D-plus grade and estimated that its deficiencies will cost the economy $4 trillion over the next decade. As Floridians go days, stretching into weeks, without power, and with old people dying in nursing homes, the urgency is clear.

Keep reading this article at: https://www.bloomberg.com/view/articles/2017-09-17/an-infrastructure-deal-should-be-easy-but-isn-t

DBE couple charged with bribery

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A federal indictment has been unsealed in Philadelphia, charging Nazik Modawi and her husband Abboud Wali with conspiracy and bribery.

According to allegations contained in the indictment, the defendants made two bribe payments in November through December 2016 to Southeastern Pennsylvania Transportation Authority (SEPTA) employees for the purpose of expediting their application for a certification from SEPTA’s disadvantaged business enterprise (DBE) program. SEPTA employees immediately reported the cash payments to authorities.

The charge of conspiracy carry a maximum sentence of 5 years in prison and a $250,000 fine; charges of bribery concerning agencies receiving federal funds carry a maximum sentence of 10 years in prison and a $250,000 fine.

An Indictment, Information or Criminal Complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.

The case was investigated by the Federal Bureau of Investigation and the United States Department of Transportation, Office of Inspector General, with assistance from the SEPTA Inspector General. It is being prosecuted by Assistant United States Attorney Denise S. Wolf of the U.S. Attorney’s Office for the Eastern District of Pennsylvania.

Source: https://www.justice.gov/usao-edpa/pr/husband-and-wife-charged-bribery

Woman in DBE front scheme gets 12 months in federal prison

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The former owner of a suburban Chicago construction business convicted of acting as an illegal front so another company could secure a lucrative city airport contract was sentenced Thursday (Mar. 16, 2017) to 12 months in federal prison.

Lawyers for Elizabeth Perino had sought probation and home confinement, but U.S. District Judge Gary Feinerman said he opted for prison to send a message to “an industry that needs to clean up its act.”

Perino’s conviction is the latest turn in an eight-year saga sparked in 2008 when Perino’s former project manager filed a whistleblower lawsuit alleging misconduct in massive projects run by industry giant McHugh Construction, a century-old company that reported more than a half-billion dollars in revenue in 2015.

That sparked a joint investigation by federal prosecutors and Illinois Attorney General Lisa Madigan resulting in the criminal charges.

Perino’s company posed as a legitimate woman-owned business, allowing Chicago-based Diamond Coring Co. to meet its requirements for hiring disadvantaged businesses in order to win a multimillion-dollar runway repair contract at O’Hare International Airport. Perino did no work for the bills submitted by her company.

Keep reading this article at: http://www.chicagotribune.com/news/local/breaking/ct-phony-woman-business-owner-sentencing-met-20170316-story.html

Construction firms seek an extra $300 million for bullet train work

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Two huge construction firms that are helping to build about 54 miles of bullet train structures in California’s Central Valley are seeking an additional $300 million on their fixed-price contracts, the Los Angeles Times has learned.

The increases, if the state ultimately agrees to cover them, would further bloat the bill for what has been touted as the easiest and most predictable section of the Los Angeles-to-San Francisco system.

The potential increases lend credence to the findings of a December risk assessment by the Federal Railroad Administration that costs for building the full 118 miles of work in the Central Valley could jump by 50%, or $3.6 billion, above current estimates.

The increases are described in letters from Tutor Perini Corp. and Dragados USA. The firms make the case that their contracts do not cover the full scope of the work and that the state’s management of the project is causing delays.

Keep reading this article at: http://www.latimes.com/local/california/la-me-bullet-train-cost-increases-20170302-story.html

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