by Michael Lowrey
DBE, as in a “disadvantaged business enterprise”, which is what most people would call a minority contractor. Certain federally-funded construction projects require the use of DBEs. Boggs Paving Inc. is accused of overstating how much work DBEs got in order to qualify for state and federal contracts.
To no great surprise, such fraud is rather common. As the UPoR reports:
Fraud involving minority contracts appears to be a growing problem, says David Wonnenberg of the U.S. Department of Transportation’s Office of the Inspector General.
In fiscal years 2009 and 2010, DBE fraud or abuse accounted for 25 percent of the Inspector General’s caseload. By April of this year, he said, that had risen to 29 percent.
Last year, a Pennsylvania bridge-beam manufacturer was convicted of what was described at the time as the largest fraud ever involving the DBE program. The company received more than $136 million in contracts by using a minority-certified company as a front. After his conviction, the bridge company’s owner faced up to 330 years in prison.
A recent Inspector General audit found significant problems in the DBE program, including “weak” contract oversight and safeguards that participation by minority firms is legitimate.
Overall the U.S. highway department has had limited success helping minority firms, Wonnenberg said, because “most certified DBEs never receive work on federal projects.”