NY construction firm charged with skimming $1.2M from public projects

Dive Brief:

Officials have recovered $1.875 million from a subcontractor accused of falsely inflating bills for cost estimating and scheduling services on public-works projects in New York, Massachusetts and New Jersey, New York Attorney General Letitia James announced Friday.
Hicksville, New York-based V.J. Associates of Suffolk and its affiliates performed services on public works projects for New York's Metropolitan Transit Authority, the Port Authority of New York and New Jersey, New York City’s School Construction Authority and other government entities throughout the three states.
As part of last week’s settlement agreement, VJA admitted to submitting false bills and also agreed to be debarred from submitting bids or being awarded any public-work contracts with the state of New York or any municipality or public body within the state for five years.

Dive Insight:

VJA performed services under two types of contracts: time-and-expense contracts (under which VJA was paid for the hours it claimed its employees worked) and fixed-fee contracts.

From January 2013 through August 2018, VJA submitted false bills to the prime contractors on certain time-and-expense public works projects where VJA employees worked from a VJA office rather than on site, at government offices, according to the New York Attorney General's Office. The bills VJA submitted falsely billed for more hours on projects than its employees actually worked.

Specifically, VJA overbilled for hours that its employees worked on unrelated, fixed-fee projects; hours that its employees spent performing administrative tasks unrelated to the projects for which they were billing; and hours that were excessive and unnecessary.

According to documents filed in October, VJA employees padded bogus time charges totaling more than $1.2 million on government construction contracts. Employees were pressured by management and openly discussed improper billing as “juicing” and “tagging” hours to “maximize” government project bills and not “leave money on the table.”

The investigation began after a whistleblower filed a "qui tam" complaint that allows private citizens to file civil actions on behalf of the government and to share in any recovery. The whistleblower will receive 22.5% of the recovery, amounting to $422,000.

The other funds will be disbursed to the three states, with $1.3 million going to New York, $152,000 to Massachusetts and $16,000 to New Jersey.