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Contractor Agrees to $1M DBE Settlement

Tuesday, April 14, 2015

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ATLANTA—A Georgia general contractor will pay $1 million for false claims made on construction projects involving the Federal Highway Administration's Disadvantaged Business Enterprise program.

C.W. Matthews Contracting Inc., of Marietta, GA, entered into a civil settlement agreement with the U.S. District Court, Atlanta, the Department of Transportation's Office of Inspector General announced April 1. 

C.W. Matthews
©iStock.com / BanksPhotos

Marietta, GA-based general contractor C.W. Matthews will pay $1 million for false claims made on federally funded projects.

The investigation was conducted with assistance from the FHWA and Georgia Department of Transportation (GDOT).

The federal DBE program is designed to ensure that small, disadvantaged companies can compete fairly for federally funded transportation-related projects. The program, established in 1981, requires DOT to set aside at least 10 percent of the funds for highway and transit financial assistance programs for DBEs.

GDOT's 'Biggest Contractor'

C.W. Matthews is one of the two biggest road contractors in metro Atlanta and has "traditionally been the [DOT's] biggest contractor," according to an article in The Augusta Chronicle. The company was paid $181 million for DOT road work in fiscal 2014, the newspaper reported, citing the state's Open Georgia website.

However, an investigation revealed that from approximately 2007 to 2010, C.W. Matthews filed "false and misleading" DBE reports to keep receiving payments under DOT-funded construction contracts.

DBE fraud
cwmatthews.com

An investigation found that C.W. Matthews filed "false and misleading" DBE reports from about 2007 to 2010, according to the OIG.

The company submitted false reports to GDOT that represented that Longoria Trucking, an actual certified DBE, was doing the required DBE construction work. However, GE Robinson, a non-DBE firm, actually completed the work, the OIG said.

Compliance Agreement

On April 2, C.W. Matthews and the FHWA agreed to an administrative settlement and compliance agreement for a three-year period to settle administrative action by the FHWA.

Among other things, C.W. Matthews agreed to:

  • Appoint a corporate compliance officer;
  • Establish a compliance program; and
  • Retain an independent monitor to submit periodic reports on C.W. Matthews' compliance to the FHWA.

If the company violates the agreement, it could face suspension and debarment action by the FHWA.

DBE fraud has come under increasing scrutiny in recent years. In March, U.S. DOT debarred a Utah contractor, whose $13 million company far exceeded the $750,000 threshold for DBE status.

   

Tagged categories: Contractors; Department of Transportation (DOT); Ethics; Federal Highway Administration (FHWA); Funding; Roads/Highways

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