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Business
& Labor
Corps Voids $65-Million Contract after Name Change Sham Exposed
(designbuildmag.com
June 1, 2001)
By Mary B. Powers
The U.S. Army Corps of Engineers has voided a $65-million contract with B.L. Harbert International, after learning the company is on the government's ineligible list.
The Savannah District of the Corps awarded the Birmingham AL firm a design-build contract for a barracks complex at Ft. Bragg NC on March 6, then voided it May 8. Harbert must reimburse the Corps $900,788, which it was paid April 12 and will be held liable for any excess reprocurement costs.
Harbert plans to appeal the decision.
The company bid the project and another government job as B.L. Harbert International. The name on the General Services Administration's list of parties excluded from federal programs is Bill Harbert International. Harbert officials say there is confusion because the names are similar, but the Corps determined that the ownership, officers, directors and employees of the two companies are the same, which makes both companies ineligible.
"All of these interrelationships between B.L. Harbert International and Bill Harbert International and Bill L. Harbert cause me to conclude that BHIC and Bill L. Harbert were using BLHI as a conduit to obtain award of this contract," Savannah contracting officer Louis Moore said in a letter to Billy Harbert, president of B.L. Harbert International.
Moore also says that the contract must be terminated for default because the company "knowingly rendered an erroneous certification" to the Corps about its eligibility to participate in government work.
Submitting false documents to the government sets the company up for both criminal and civil charges, a government attorney says.
Harbert was suspended from government work while the U.S. Justice Dept. investigates the firm's alleged participation in an international scheme to rig bids on U.S. Agency for International Development projects in Egypt.
The similarities between the two Harbert companies was brought to the Corps attention by Caddell Construction Co., Montgomery AL, the second low bidder on the Ft. Bragg barracks. Caddell challenged the award and asked the Corps to suspend work until it could evaluate evidence on the affiliation of the two Harbert companies. When the Crops refused, Caddell filed a lawsuit against the Corps in U.S. Court of Federal Claims on April 20 for failing to follow procurement law, and asked for a temporary restraining order. "By failing to take this information into account and apparently relying solely upon the representations of Harbert, the Savannah District awarded the contract to an offeror that was not eligible to offer a proposal," the complaint says.
Under the federal acquisition regulations, affiliates of ineligible companies are also ineligible. It defines an affiliate as "including but not limited to interlocking management or ownership, identity of interest among family members, shared facilities and equipment and common use of employees."
Bill L. Harbert retired from B.L. Harbert International effective Dec. 13, 2000, a week after he and his company were added to the ineligible list. Bill Harbert signed a letter to the Mobile Corps District in February as a stockholder of B.L. Harbert International, Moore says. The letter said the two companies share facilities and that most of the old company's employees shifted their employment to the new company on Jan. 1, 2001.
Only one of 26 projects listed to support past performance was actually performed by the bidding Harbert, Moore says. The ineligible company completed the rest.
The Navy awarded B.L. Harbert a $21-million contract in January for a barracks in Puerto Rico. But Navy officials say it has no plans to void that contract. "That tells me that nobody cares. They are condoning fraud. Where is the Navy's integrity?" asks Kirby Caddell, president of Caddell Construction.
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