Legal
Engineered-Products Firm Sentenced to $7M Fine For Bid-Rigging
Contech Engineered Solutions LLC, which makes engineered construction products,. will pay a $7-million criminal fine after pleading guilty to a federal bid-rigging charge on contracts for North Carolina Dept. of Transportation projects, the U.S. Dept. of Justice says.
Judge Louise W. Flanagan in U.S. District Court in New Bern, N.C., on June 7 sentenced the West Chester, Ohio, firm also to pay the agency restitution of more than $1.5 million.
The sentencing terms are in line with a May 11 Contech plea agreement with DOJ unsealed on June 7. The company pleaded guilty to one charge of bid-rigging and one charge of conspiracy to commit mail or wire fraud.
The company also agreed to cooperate with DOJ’s ongoing investigation.
Last October, a federal grand jury in Raleigh indicted Contech and former company executive Brent Brewbaker on six counts. He “remains under indictment,” the government said.
Contech said in a statement that the company has resolved the charges brought against it, through the agreement with DOJ.
It added, "While the charges arise from the conduct and direction principally of a former employee in North Carolina, we take antitrust laws very seriously and we accept responsibility for that person's conduct."
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Contech said, "Since the DOJ informed us of their investigation, we have cooperated fully with the investigators and have taken numerous measures to prevent the recurrence of this sort of conduct."
It added, "We remain focused on serving our customers consistently with our commitment to integrity and ethics in all our dealings."
Contacted by ENR, Andrew Barksdale, a NCDOT spokesman said, “We have no comment.”
In the indictment, the government alleged that from at least 2009 through June 2018, Contech and Brewbaker obtained bid prices from another firm, identified only as Company A, and submitted bids to NCDOT for aluminum structure projects “that were intentionally higher than the bids from Company A."
The indictment identifies Brewbaker as the person “responsible for crafting and submitting aluminum structure bids on behalf of … Contech to NCDOT and directed the preparation."
The indictment also states, “Defendants manipulated the price of those bids to conceal their conspiracy with Company A.”
It says that Contech and Brewbaker also included certification that a bid was “submitted competitively and without collusion,” although they knew the bids and certifications were "false, fraudulent and misleading.”
In an Oct. 20, 2020, ENR story, Brewbaker's attorney Ripley Rand, in a statement, expressed disappointment that the federal government brought charges against Brewbaker and Contech. Rand added that the defendants "cooperated with the government's investigation for well over a year and...provided thousands of pages of documents and analysis related to the bids at issue."
Rand, a partner with Raleigh-based law firm Womble Bond Dickinson (US) LLP. said, "All of these documents show that North Carolina taxpayers did not pay one extra dollar for any off these projects as a result of the Contech bids and that Mr. Brewbaker did not gain any financial benefit whatsoever in connection with them."
He said, "We look forward to all of the facts coming out and to Mr. Brewbaker having the opportunity to clear his name."
Story updated on 6/21/21 to include October 2020 comments from Brent Brewbaker's attorney.
