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Dive Brief:
- A highway contractor based in Rahway, New Jersey has agreed to pay $950,000 to settle claims he misrepresented himself as disadvantaged in order to snag federal jobs, the Justice Department announced in a news release last week.
- According to the release, MV Contracting won several reserved contracts funded by the Federal Highway Administration between October 2016 and April 2019 under the DOT’s Disadvantaged Enterprise Program. The DOT targets that 10% of the funds will go to DBEs, which include women- and minority-owned businesses.
- But the U.S. Attorney’s Office for the District of New Jersey claimed that MV Contracting did not qualify as a DBE and knowingly submitted improper claims to be paid through the program with federal funds from anyway
Diving knowledge:
MV Contracting did not immediately respond to a request for comment. The US attorney’s office said that in light of the settlement agreement, its claims are merely allegations and there has been no determination of liability by the contractor.
DBE fraudin which uncertified Contractors say qualifying for programs aimed at underrepresented companies has been a recurring problem in construction. In 2022, the New York Attorney General announced a $1.3 million settlement with 10 companies for supplier diversity fraud, where purchase orders for materials were flagged by women- and minority-owned companies that they did not have a significant participation in the workplaces. .
Created in the 1980s to give traditionally underrepresented businesses a better chance at a piece of federal contracts, the DOT DBE The program has recently faced constitutional challenges.
Last week, a federal judge partially blocked the DBE program for contracts offered by two companies in Indiana and Kentucky, and said there were likely certain criteria to determine DBE the status would ultimately be deemed unconstitutional.
