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NY Shuts Down Bridge Painting Contract

Thursday, March 20, 2014

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New York State officials have rejected a $4.7 million contract to paint 13 bridges, citing “serious concerns” about the state transportation agency's chosen contractor. 

State Comptroller Thomas DiNapoli nixed a deal with Limnes Corp. for bridge painting on Long Island after his staff reviewed the contract and identified concerns about the company and about the New York State Department of Transportation's "lack of due diligence in the contracting process." 

Specifically, the comptroller's office raised questions about Whitestone, NY-based Limnes' connection to two companies debarred by the state Department of Labor for failing to pay prevailing wages and falsifying payroll records.

New York State DOT
New York State Department of Transportation

Citing concerns with contractor Limnes Corp., New York's comptroller rejected a $4.7 million contract awarded to paint 13 bridges.

The State Comptroller reviews and approves contracts for all state agencies and some for state public authorities. 

'Unresolved Questions'

"This company appears to be closely affiliated with two other entities that have been in serious trouble and are fordbidden to do business with the state," DiNapoli said.

The two other companies are Matsos Contracting Corporation and its alter ego GBE Contracting Corp. Both were banned in 2010 from doing business with the state of New York until 2015. 

In a letter to the DOT Office of Contract Management's director, William Howe, DiNapoli's office said its decision to deny the contract was influenced by "the inadequacy of the agency's review" and "unresolved questions" about Limnes' relationship to the debarred companies. 

Upon asking Limnes to clarify its current ownership, the DOT was told that Popi Shinas was the "100 percent owner" of the company, after ownership was transferred to her in June 2010 from Emilia Shinas, current owner of Matsos. Limnes also said that Popi Shinas previously worked as a bookkeeper for Matsos. 

Following the Rules

"The Department of Transportation should have investigated Limnes' affiliations and had concrete answers before awarding this contract," DiNapoli said. "There are many companies competing for work right now, and the state should make certain that it puts public projects into the hands of companies that will follow the rules."

According to Long Island Newsday, DiNapoli's office approved a $5.9 million contract last year with Limnes for painting and rust removal on Long Island bridges.

NY Comptroller Thomas DiNapoli
Office of the State Comptroller

"There are many companies competing for work right now, and the state should make certain that it puts public projects into the hands of companies that will follow the rules," NY Comptroller Thomas DiNapoli said.

Jennifer Freeman, a DiNapoli spokeswoman, said the information submitted last year by the DOT appeared complete, which was not this case this year. 

"If we had known what we do today, we would have likely rejected the contract last year," Freeman told Long Island Newsday. 

DOT 'Failed' 

Limnes disclosed its connection to Matsos, but not Matsos' debarment, to the DOT as required. The DOT had access to the information showing that both companies were debarred, according to DiNapoli's office.

Additionally, according to DiNapoli's office, Limnes told the DOT they "did not believe they needed to disclose the debarment of Matsos[,] ... avowed no knowledge of the debarment details, and stated Matsos and Limnes are not connected in any way."

bridge painting contracts
NYCDOT / Fouad Althaibani via fhwa.dot.gov

DiNapoli said the state DOT should have been familiar with the debarred companies.

The DOT was asked to assess several issues in an email from DiNapoli's office in January and each issues relevance to Limnes' responsibility for the contract.

The DOT was also supposed to justify why the agency felt the issues did not impact the transaction. However, "[n]o individual assessment of the issues or additional justification was provided, as requested," the comptroller's office said. 

According to office, the DOT should be familiar with both Matsos and GBE, since the companies were previously contract holders, as well as with the "overarching familial relationship" of Matsos, GBE and Limnes. 

"Yet despite such knowledge, DOT failed to provide an adequate assessment of this issue, either on its Vendor Responsibility Profile or when specifically requested on follow-up correspondence," the comptroller's office stated. 

However, OSC can re-evaluate its decision if the DOT can adequately support and document that Limnes is a responsible vendor.  

   

Tagged categories: Bridges; Contractors; Contracts; Department of Transportation (DOT); Ethics; Painters

Comment from Michael Deaton, (3/20/2014, 10:36 AM)

You have to be a little bit slicker than the party that you are dealing when it comes to state contracts....the mouse has to outsmart the cat.


Comment from Chuck Pease, (3/20/2014, 10:52 PM)

Good to see that once in a while the low baqllers aned cheats get there just dessert. Tough when we play by the rules but hey, that helps to level the playing feild.


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