Report: Phila. inattentive when handing out contracts
PHILADELPHIA A report from Philadelphia Inspector General Amy Kurland says much of the information provided by companies seeking city contracts is never independently verified, putting the city at risk of being defrauded.
PHILADELPHIA A report from Philadelphia Inspector General Amy Kurland says much of the information provided by companies seeking city contracts is never independently verified, putting the city at risk of being defrauded.
Kurland's report, issued Friday, comes after a recent investigation into a contractor now accused of lying on paperwork and submitting forged surety bonds, similar to insurance, to win construction and demolition contracts from the city in 2011 and 2012.
The owner of the company, John Hart, was arrested Wednesday and charged with 10 counts of felony forgery and four misdemeanors.
Hart's company, Hart Enterprises & Associates, was paid $275,000 on five city contracts, despite owing $21,000 in back taxes and not paying its workers more than $123,000 in wages.
Payment isn't supposed to be made until contractors settle delinquent taxes and comply with the city's living-wage standards. Hart since has paid $97,000 in back wages, Kurland said.
The Office of Inspector General and the city are seeking to recover an additional $200,000 from the company to settle the tax liability and other damages, and to finish paying back the workers.
The five contracts included three demolitions, installation of sprinklers, and a bathroom remodeling at Philadelphia International Airport.
Kurland said in an interview the bathroom job was done so poorly another contractor had to be hired, costing the city an additional $153,000, which is part of the restitution being sought.
The investigation into Hart's contracts began at the request of airport officials after the bathroom debacle.
Investigators subsequently learned that Hart had previous convictions for forgery and theft by deception, and that his company had multiple liens and had failed to repay a loan from the Philadelphia Industrial Development Corp.
Efforts to reach Hart for comment Friday were unsuccessful. No one responded to a message left at a number listed for his company.
Kurland said Hart lied on paperwork about his company's tax and financial status and then submitted the forged surety bonds. He was forced to forge the bonds because his company was in such poor shape he could not obtain them by legitimate means, the report said.
Hart did not disclose any of these problems, and the city accepted Hart's information at face value, Kurland said.
"The city cannot afford to rely solely on a bidder's representations," her report said. "There must be a stronger effort to verify relevant background information and supporting documentation."
The report contains a number of recommendations for independently verifying information submitted by contractors and for establishing protocols to check surety bonds. Those bonds protect the city if a company fails to live up to the terms of a contract.
The report also recommends better communication across city departments to discover when contractors have not met the requirements for payment and to hold the payment until they do.
Kurland said many of the changes have been implemented.
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