Department of Transportation

Contract with Grace Industries, Inc. for Construction on the West Side Highway

The Department of Transportation contracted with Grace Industries, Inc. for construction work on the West Side Highway in New York City. We questioned or proposed disallowing nearly $3.3 million in costs that have been claimed by the contractor so far on this $53 million contract. For example, we determined that the contractor overbilled the Department by $1.8 million for its unemployment insurance and workers’ compensation costs, and overbilled for equipment by more than $540,000. In overbilling equipment costs, the contractor used incorrect billing rates, claimed costs that were already accounted for in main office overhead, and charged excessive hours for equipment use. We also determined that the Department engineer in charge of the project submitted false certifications for payment requests of more than $1.1 million, and submitted suspect certifications for additional payment requests of more than $500,000. We further determined that another Department engineer inappropriately certified reports of labor, materials and equipment used on the project; the certifications were inappropriate because the engineer did not actually monitor the work, as claimed on the reports. We recommended certain improvements in the Department’s oversight of the contractor, and will closely review future billings from the contractor.

For a complete copy of Report BSE-2003-003 click here.
For a copy of the 90-day response click here.