An ongoing federal antitrust investigation into bid rigging and other criminal conduct in the aluminum structures industry has resulted in grand jury indictments of Contech Engineered Solutions LLC and a former executive for their alleged role in a decade-long bid-rigging effort to gain North Carolina Dept. of Transportation contracts.
The six-count indictment, filed in U.S. District Court in Raleigh on Oct. 23 claims that West Chester, Ohio-based Contech and former area vice president Brent Brewbaker conspired to rig bids for aluminum headwalls and other drainage structures used in a variety of NCDOT road and bridge projects between 2009 and 2018.
Brewbaker and the company were also charged with defrauding the agency by submitting bids via U.S. Postal Service and email that the U.S. Justice Dept. says “were falsely held out to be competitive and free of collusion.”
The firm is a major provider of products and systems for bridges, drainage, erosion control, retaining walls, sanitary sewers and stormwater management that was acquired in 2018 by Quikrete Holdings Inc., a large manufacturer of packaged concrete and cement mixes. A business publication report at the time estimated the deal value at $950 million, and 2015 revenue for Contech of $695.3 million, with the firm having 1,400 employees.
The indictment cited numerous examples in which Contech allegedly submitted a bid higher than that of a presumed competitor that was subsequently selected by NCDOT, then supplied aluminum structures to that firm.
A grand jury also charged Brewbaker and the company with defrauding the agency by submitting bids via U.S. Postal Service and email that Justice says “were falsely held out to be competitive and free of collusion."
In a statement, Contech denied that the company and its unnamed “exclusive distributor and business partner” participated in any illegal schemes, claiming that the case “is more complicated than the indictment suggests, and a different legal test applies than the one offered by the government.”
The company also asserts that its practices did not affect competition, nor was there unreasonable restraint of trade or overpayment by NCDOT for goods and services provided, and says the agency "continues to be a valued customer.”
Brewbaker, who had been employed by Contech for more than 25 years, also is immediate past president of the Southeast Corrugated Steel Pipe Association, which covers an eight-state region.
“We are very disappointed to learn that the government has brought charges against Mr. Brewbaker and Contech with respect to bids for NCDOT projects. We have cooperated with the government’s investigation for well over a year and have provided thousands of pages of documents and analysis related to the bids at issue," said a statement from Ripley Rand, Brewbaker's attorney, who is a partner at Raleigh-based Womble Bond Dickinson (US) LLP.
"All of these documents show that North Carolina taxpayers did not pay one extra dollar for any of these projects as a result of the Contech bids and that Mr. Brewbaker did not gain any financial benefit whatsoever in connection with [them, " the statement added. "We look forward to all of the facts coming out and to Mr. Brewbaker having the opportunity to clear his name.”
NCDOT has not commented.
A trial date has not been scheduled. If found guilty on multiple counts, Contech could be ordered to pay more than $100 million in criminal fines, while Brewbaker could face $1.2 million in fines and prison time.