Only after the city had paid $275,000 to a contractor did officials realize the business had lied on its application. According to the Philadelphia inspector general’s office, the incident has prompted a number of changes in the city’s contracting process that should prevent this kind of fraud in the future.
The contractor had bid on a bathroom renovation project at the airport that was slated for 2011 and 2012. A review of his credentials turned up a few salient facts that he had not disclosed on his application. He had a criminal history, outstanding liens, judgments against him, and there were tax issues as well. Any one of these items should have raised a red flag during the bid review process, but the city missed them all.
According to the inspector general, the city has had no process in place for checking the accuracy of construction project applications. They have just taken the applicants’ word that the information provided is accurate and comprehensive. When million-dollar contracts are involved, it seemed a bit foolhardy not to run independent checks during pre-qualification, much less any other phase of the project.
The city is instituting checks at the beginning of key phases of each project. There will be checks at the time of the bid and the time of the award. During the contract at least one more check will occur. The final check will be just before payment.
The objective is to prevent fraud — or most of it. There will always be fraud, the inspector general told reporters, but “the more checks that we have, the more likely we are to prevent it.”
The city eventually canceled the agreement with the contractor who had misrepresented himself. He is now facing criminal charges.
Source: CBS Local – Philadelphia, “Nutter Administration Tightening Checks on City Construction Bidders,” Mike Dunn, Oct. 25, 2013
