- The Washington Times - Thursday, February 12, 2004

A construction firm whose owner was convicted in a scheme to give kickbacks to D.C. public works officials has won a multimillion-dollar contract from the D.C. Water and Sewer Authority to remove lead-lined pipes in the city.

WASA agreed in a Jan. 6 contract to pay C&F; Construction Corp. $6.3 million to replace hundreds of lead-coated service lines in the District. The lines are responsible for high traces of lead discovered last summer in tests of the city’s tap water, WASA officials said.

Florentino Gregorio, owner of C&F;, was sentenced in U.S. District Court in February 2002 to one year of probation for his role in a scheme to overcharge the District for road paving materials during the mid- and late-1990s.

Mr. Gregorio pleaded guilty to supplementing a public salary, and C&F; separately pleaded guilty to paying a bribe to a public official, the U.S. Attorney’s Office said.

Federal convictions against Mr. Gregorio and C&F; prompted sanctions against the firm by the Federal Highway Administration and by Maryland officials, preventing the firm from competing for public contracts for one year.

The voluntary federal debarment expired last year, but the firm cannot compete for contracts with public agencies in Maryland until October, officials at the Maryland Board of Public Works said.

WASA is governed by an 11-member board of directors. Six members are named by the D.C. mayor and five are appointed by officials in Prince George’s, Montgomery and Fairfax counties.

WASA officials yesterday said they knew about the company’s past when they hired C&F.;

“They gave us assurances that they had made changes,” said Michael S. Marcotte, deputy general manager for WASA. “Our experiences have been that C&F; has been very responsive.”

Mr. Marcotte said WASA did suspend the firm from bidding for contracts from December 2002 until February 2003. “We have restored them,” he said.

The U.S. Environmental Protection Agency ordered WASA to begin replacing its lead service lines after tests revealed tap water samples taken from thousands of customers exceeded the federal standard of 15 parts per billion.

Under the contract approved last month, C&F; Construction will replace 800 lead services lines among the 23,000 still in use by WASA in the District. WASA is a public agency funded by ratepayers, who may end up footing the bill for the lead line replacement.

C&F; Construction was one of three road construction companies convicted in a federal probe of the city’s Department of Public Works during mid- and late-1990s that authorities dubbed Operation Hot Mix.

“The companies that participated in this scheme were overpaid and they would pay the [city] inspector a substantial kickback,” Assistant U.S. Attorney Roger Burke said in legal documents unsealed last year.

“So both the companies and the inspectors profited from the fraudulent scheme at the expense of not only District of Columbia taxpayers, but because most of this money was federally funded through Federal Highway Administration, but all United States taxpayers,” Mr. Burke said.

Prosecutors said Mr. Gregorio gave city highway inspectors cash and gifts, including landscaping equipment, in exchange for overstating how much concrete his firm delivered to various job sites in the city.

In one instance, prosecutors said Mr. Gregorio gave a city highway inspector a package containing $15,000 in cash in exchange for phony job tickets overstating how much concrete C&F; was supplying.

Nine former city highway inspectors and engineers were convicted as a result of the federal investigation. An attorney for Mr. Gregorio blamed them for the scheme.

“Based on the facts of our independent investigation, it is clear that the Department of Public Works and its employees were more than mere passive participants in any illegal activity,” Mr. Gregorio’s attorney, Mark J. Biros, wrote in a letter to Mr. Burke in November 2000. “They were the instigators of it.”

C&F; was suspended from doing business with the D.C. government last year by D.C. Chief Procurement Officer Jacques Abadie III, but the D.C. Council overturned that ruling after stripping most of Mr. Abadie’s powers to debar contractors.

Council members were dissatisfied with Mr. Abadie’s decision to debar Fort Myer Construction Corp. for three years after the firm’s conviction in a similar scheme.

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