Bovis Lend Lease has agreed to pay back New York City $5 million for overcharges on more than 100 municipal projects over the past decade, the city said on Jan. 5.
The firm charged the city for overtime and extra pay to foremen “for which they had not worked,” according to the announcement. Mayor Michael R. Bloomberg and city Dept. of Investigation Commissioner Rose Gill Hearn said the case was based on an analysis of records “and practices” on more than 100 city-funded jobs that Bovis had managed between 1999 and 2009.
“This settlement shines a light on one such practice that drove up costs to the city,” said Hearn. A whistle-blower was responsible for bringing the practice to the attention of city officials, according to industry sources.
Bovis had been charging city agencies for an additional hour of daily overtime for each foreman, say industry sources familiar with the practice who asked to remain anonymous. The payment was treated as an informal bonus. In exchange, one of the sources says, the contractor and the city agencies understood that the foremen would be responsible for limiting overtime worked by craftspeople.
“In this way, you could say that the city benefited,” says another source. Instead of waiting for investigations to conclude, New York City officials decided it was better to collect a settlement, he says.
The Manhattan district attorney and federal prosecutors in Brooklyn are still investigating the practice, according to Lend Lease, the Australian-based parent of Bovis.
A spokesman for Brooklyn prosecutor Loretta E. Lynch would not comment, but her office’s probe is focusing on similar overcharging by Bovis on its federal, state and other municipal projects, according to published reports. A city construction association official says the probe is confined to one company.
Neither Bovis nor the city would provide information about which specific projects were involved. The company says it cooperated with all investigations and admitted no liability in its settlement with New York City.