- The Washington Times - Friday, March 26, 2004

City officials are refusing to do business with a company recently hired by the D.C. Water and Sewer Authority to replace hundreds of lead-lined water pipes, citing concern over the owner’s guilty plea in a scheme to bribe city highway inspectors.

The city’s newly formed D.C. Debarment and Suspension Panel said C&F; Construction and its president, Florentino Gregorio, cannot compete for D.C. government contracts until Aug. 27, according to a 10-page ruling by the panel, which The Washington Times obtained yesterday.

The panel cited Mr. Gregorio’s guilty plea in federal court in 2002 for his role in a scheme to overcharge the District for road-paving materials by giving cash kickbacks to city public works officials.

The conviction prompted sanctions against the company by the Federal Highway Administration and by Maryland officials, preventing the contractor from competing for taxpayer-funded projects for one year.

The voluntary federal debarment expired last year. However, the company still cannot compete for contracts with public agencies in Maryland until October, according to officials at the Maryland Board of Public Works.

Despite its troubles finding work elsewhere, the company won a $6.3 million contract in January from WASA to replace 800 lead-coated service lines in the District after tests showed high levels of lead in the city’s tap water.

Michael S. Marcotte, deputy general manager for WASA, told The Washington Times last month that C&F; officials gave the agency assurances the company has a rigorous compliance program to prevent future illegal activities.

However, the District’s debarment panel criticized that compliance program in its recent decision against the company.

“For one thing, the [C&F;] compliance officer reports to the general manager who reports to the president,” the panel said in letter to Mr. Gregorio last month. “Considering his criminal conviction, the panel would be more assured if the compliance officer reported to someone independent or an active board of directors.”

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

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.

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. He was sentenced in U.S. District Court in February 2002 to one year of probation. Nine former city highway inspectors and engineers were convicted and lost their jobs as a result of the federal investigation.

C&F; officials told the city’s debarment panel that the company had changed its billing procedures, set up an anonymous hot line for employees to report problems and hired an independent accountant to monitor finances.

The debarment panel handed down the maximum three-year debarment sentence, but also gave the company “time served.” According to the panel, despite the lack of a formal debarment sentence, city contracting officials had been refusing to do business with C&F; for more than two years.

WASA is a public agency funded by ratepayers, so the city’s debarment will not affect C&F;’s ability to contract with WASA.

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