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Category Archives: Disadvantage Business Enterprises (DBE)

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District Court Allows DBE False Claims Act Case to Proceed

Posted in Construction Law, Disadvantage Business Enterprises (DBE), False Claims Act

Last week, I posted about how whistleblowers continue to receive large settlements related to DBE fraud. A somewhat recent case from the federal court in Maryland shows how whistleblowers are ferreting out DBE fraud on construction projects receiving any form of federal funding. The Case The case involves a bridge painting project in Maryland that… Continue Reading

Whistleblowers Continue to Receive Large Settlements in DBE Fraud Cases

Posted in Disadvantage Business Enterprises (DBE), False Claims Act

It has been awhile since I last blogged about fraud involving the Department of Transportation’s disadvantaged business enterprise (DBE) program.  Trust me, the problem has not gone away. If anything, prosecutions and civil claims filed under the False Claims Act alleging DBE fraud have become so frequent, I could not write a blog post about… Continue Reading

House Passes Game Changing Bill for Vet Owned Construction Firms

Posted in Disadvantage Business Enterprises (DBE)

Yesterday, the House of Representatives – by a wide margin-  passed the “Fairness to Veterans for Infrastructure Investment Act of 2015.” Simply put, the Bill amends the DOT DBE regulations to include veteran owned small businesses (VOSB) within the definition of disadvantaged businesses.  If this Bill is signed into law, this means that VOSB’s could be used… Continue Reading

DBE Fraud Investigations Continue

Posted in Disadvantage Business Enterprises (DBE)

Recent announcements from the Department of Transportation’s Inspector General show that authorities’ appetite for DBE fraud cases is not letting up.  On July 7, 2015, the IG announced it had reached a settlement with a certified DBE firm in Georgia that submitted false claims on a DOT funded highway project.  And, on June 30, 2015,… Continue Reading

FBI Raids Firm Accused of DBE Fraud

Posted in Disadvantage Business Enterprises (DBE)

I have previously posted and spoken about the increasing prevalence of DBE fraud investigations and prosecutions.  Usually those investigation are started by the Department of Transportation’s Inspector General’s Office and may lead to the unsealing of an indictment by the Department of Justice.  I have also warned of the growing threat of whistleblower lawsuits related… Continue Reading

DOT Issues Final DBE Rule Changes

Posted in Construction Law, Disadvantage Business Enterprises (DBE)

Over two years ago, the Department of Transportation published notice that it intended to make changes to the federal regulations governing the DOT’s Disadvantaged Business Enterprise program.  After an extended comment period, today, October 2, 2014, the DOT issued the final DBE rule changes. These changes become effective November 3, 2014.  The changes impact five… Continue Reading

Regional Manager Indicted in DBE Fraud Case

Posted in Disadvantage Business Enterprises (DBE)

In previous posts, I have discussed how failing to abide by the Department of Transportation’s DBE regulations can lead to the criminal indictment of construction company executives. Now, a case out of the Southern District of New York – a hotbed of DBE fraud prosecutions – should have all employees of a firms that fail… Continue Reading

Free DBE Compliance Audit

Posted in Disadvantage Business Enterprises (DBE)

This blog repeatedly chronicles the ramifications of failing to comply with the Department of Transportation’s Disadvantaged Business Enterprise regulations.  Jail time for executives, disbarment, fines, and bid challenges are real threats to those contractors that run afoul of the DOT’s DBE rules.  Because of the amount of interest in this area, I am pleased to announce… Continue Reading

Documenting Good Faith Efforts on 100% State Funded Projects

Posted in Disadvantage Business Enterprises (DBE)

As readers of this blog know, demonstrating “good-faith efforts” to subcontract work to disadvantaged business enterprises (DBE)  in order to meet a DBE participation goal has long been the law on projects receiving funding through the FWHA or FTA.  Recently, the Pennsylvania Department of Transportation made a revision to its regulations requiring that the same… Continue Reading

This Could Be the Biggest DBE Fraud Case Yet

Posted in Disadvantage Business Enterprises (DBE)

In several previous posts, we have talked about the growing risk to contractors that violate the federal, state, and local D/M/WBE programs.  This summer we saw the sentencing of the remaining defendants in the infamous Schuykill Products case.  That case was a $136 million DBE scam that the FBI called the largest DBE fraud ever…. Continue Reading

Failing to Understand DBE Regs Leads to Bid Rejection

Posted in Disadvantage Business Enterprises (DBE)

In an earlier post, I talked about bid challenges and rejections being one of the “hidden dangers” of failing to understand and follow DBE regulations.  I explained how strict minority set asides or quotas are almost always unconstitutional.  In fact, the DOT DBE regulations explicitly state that the DBE goals are not quotas. Rather, they… Continue Reading

Yet Another False Claims Act Case Involving the DOT’s DBE Program

Posted in Disadvantage Business Enterprises (DBE)

Readers of this blog know that I have been warning that actions brought under the False Claims Act against contractors violating DBE programs have been increasing.  Last week, I wrote about a False Claims Act case brought by a project manager, employed by a third party subcontractor, that resulted in a $2 million award to… Continue Reading

Whistleblowing Project Manger Awarded $2 Million in DBE Fraud Case

Posted in Disadvantage Business Enterprises (DBE)

While criminal prosecutions involving construction company executives violating federal, state, and local disadvantaged business enterprise programs (DBE) rightfully receive most of the attention, of equal or greater concern to contractors should be whistleblower lawsuits brought under the False Claims Act for violations of DBE regulations.  As I talked about in my recent DBE compliance webinar… Continue Reading

Did a DBE Compliance Program Prevent Jail Time?

Posted in Disadvantage Business Enterprises (DBE)

Another week and another case of DBE fraud resulting in significant fines.  This one involves Connecticut construction firm that agree to pay $2.4 million in fines to settle the fraud allegations.  The story follows an all to familiar “pass through” fact pattern:  a construction company obtains transportation contracts, commits to performing work using certain DBE firms,… Continue Reading

No Transportation Work, No Need to Worry About DBE Fraud? Think Again

Posted in Disadvantage Business Enterprises (DBE)

On March 13, 2014, the Department of Justice announced that a the owner of a Chicago based utility contract was sentenced to 17 months in federal prison and ordered to pay over $500,000 in restitution for DBE fraud scheme used to obtain over $5 million in contracts from the City of Chicago. What is important… Continue Reading

The Hidden Dangers of Failing to Follow DBE Rules (Part 2): The False Claims Act

Posted in Disadvantage Business Enterprises (DBE), False Claims Act

Mega-law firm Wilmer Hale recently published a its 2013 False Claims Act Year in Review.  The report is an insightful read for any business dealing with the federal government.  However, two statistics in particular should stand out for the construction industry: False Claims Act suits hitting an all-time high of 753 in 2013, and Government… Continue Reading

The Hidden Dangers of Failing to Follow DBE Rules (Part 1): Bid Challenges

Posted in Disadvantage Business Enterprises (DBE)

Criminal indictment is not the only threat to contractors who fail to follow the Department of Transportation’s Disadvantaged Business Enterprise (DBE) regulations.  While the risk of jail and civil fines is real, it is limited to those contractors that knowingly violate the DBE rules by engaging in a scheme to use the DBE program to… Continue Reading

The DOT’s Disadvantaged Business Enterprise Program: The Huge Cost of Non-Compliance

Posted in Disadvantage Business Enterprises (DBE)

Join us for a webinar on Mar 27, 2014 at 2:00 PM EDT. Register now! https://attendee.gotowebinar.com/register/5788498068269059073 On January 13, 2014, the Department of Justice announced that two former executives of Schuylkill Products, Inc. had each been sentenced to 2 years in federal prison and forced to pay $119 million is restitution because of their role… Continue Reading

Why You Need A DBE Compliance Audit

Posted in Disadvantage Business Enterprises (DBE)

THE RISK IS REAL: On January 13, 2014, the Department of Justice announced that two former executives of Schuylkill Products, Inc. had each been sentenced to 2 years in federal prison and forced to pay $119 million is restitution because of their role in what the FBI called the largest ever fraud involving the Department… Continue Reading

The Two Most Common Types of DBE Fraud

Posted in Disadvantage Business Enterprises (DBE)

Yesterday, the Wall Street Journal reported that stepped up scrutiny by regulators is at that the top of general counsels’ list of legal concerns in 2014.  In recent years, construction companies have felt this stepped up pressure, particularly if they deal with the Department of Transportation’s Disadvantaged Business Enterprise regulations.  In recent years, Federal and State… Continue Reading