Joint-venture contractors on the 12.3-mile Hiawatha light-rail line in Minneapolis-St. Paul have agreed to pay $4.6 million to settle federal charges that they fraudulently reported use of disadvantaged business enterprises (DBEs) on the $715-million project, completed in 2004. Parsons Transportation Group, part of the project's design JV, says it was mistakenly named as a pact participant in the Justice Dept.'s Aug. 24 announcement. The firm and other designers were not targets of the government subcontracting probe nor did they “review or approve” DBE activities, a spokeswoman says. Justice did not return calls for comment.
Project JV contractor Minnesota Transit Constructors Inc. will pay $1.85 million of the total settlement, with lead firm Granite Construction Inc. paying $1.1 million, says a spokeswoman. Also on the team was contractor C.S. McCrossan Inc., Maple Grove, Minn. Unnamed subs will pay a total of $2.75 million, she says. The pact resolves allegations that firms knowingly submitted false claims of DBE use on the project. The line links the cities' downtowns with the local airport and included $424 million in federal funds. Edwards and Kelcey, a unit of Jacobs Engineering Group, was also on the design team.
Granite CEO James H. Roberts says none of the parties to the settlement were charged.They deny federal and state fraud allegations and admit no liability. Under the agreement, firms can still contract with the federal government and Minnesota's transportation agency. Roberts touts the project's success in DBE outreach and cites as “incorrect” allegations that the JV misrepresented DBE use.
A spokeswoman for the Metropolitan Council, the Minneapolis-St. Paul regional planning agency and grantee of project federal funding, says that no other DBE fraud probes are under way. She says the agency has an ongoing effort to monitor compliance “to ensure that prime contractors are living up to their commitments.”