This Month in Corruption: Contractors Fined for False Billing on Assembly Sq. T

Two contractors involved in building the Assembly Square T station knowingly submitted inflated payment estimates for materials and will pay large fines and penalties to resolve the case, according to the Office of Attorney General Maura Healey.

A press release from Healey’s office, issued this past Friday, Feb. 24, announced: 

“S&R Construction Enterprises, its president Stephen Early, subcontractor A&S Electrical LL and its manager, Gregory Lane, agreed to resolve allegations that they violated the Massachusetts False Claims Act by knowingly submitting false and inflated pay estimates to improperly front load payments under their contracts. 

“In addition, S&R Construction and A&S Electrical are barred from bidding on and accepting new public contracts in Massachusetts for five years and one year, respectively.”

S&R Construction was the general contractor for the Assembly Square station construction project.  The T awarded the company a $29 million contract in October, 2011; the station opened some three years later.

The “false and inflated requests for payment” reflected that the companies “had purchased construction materials in greater quantities or at higher prices than they had actually purchased, in order to receive larger payments than they were entitled to at the time under the lump sum contract,” the press release said.

Under the terms of a consent agreement finalized last week in Suffolk County Superior Court, the parties will pay over $420,000 to resolve the allegations, including civil penalties of at least $110,000.

S&R Construction has also been cited by the Attorney General for “failure to pay the prevailing wage and failure to submit true and accurate time records on both the construction of the Assembly Square station and the Wachusett Commuter rail station on the Fitchburg line.” 

These citations will require S&R Construction to pay more than $40,000 in restitution to its employees and more than $25,000 in penalties, the Attorney General’s office reported.

The investigation by the Attorney General began with a referral from the Office of State Inspector General Glenn A. Cunha.  Reportedly, the Inspector General had been tipped off that A&S Electrical allegedly asked one of its subcontractors to submit inflated invoices.

“Building new public transportation infrastructure is how we will move Massachusetts forward,” said Healey, “and taxpayers deserve confidence in how we spend every dollar.  Overbilling and front-loading create unacceptable risks of delays and degrade the integrity of our public contracting.”

She emphasized that “taking on this fraud is a top priority.”

The first new station in the metro subway system since 1987, Assembly Square has been the linchpin of the revitalization of a large, formerly industrial site in East Somerville, which is now filled with apartments, condominiums, offices, restaurants and stores.