District Sues Contractor for CBE Program Fraud
A D.C. company scammed the District government by abusing its status as a business based in the city on three separate projects, according to a lawsuit filed by the District last week.
Contractor EEC of D.C. abused the city's Certified Business Enterprise program and a mechanism for joint ventures intended to help local companies win bigger contracts, according to lawsuit filed last Wednesday. Instead of performing the work it promised on city contracts, EEC allegedly used its CBE status to collect payoffs from a larger company willing to bring it on for a chance at winning.
EEC's partner in the joint ventures, Rockville, Md.-based Forrester Construction, settled with the District a year ago for $1 million and agreed to not seek CBE bidding advantages for two and a half years. The companies' joint venture for the renovation of Anacostia High School was one of the worst examples in Washington City Paper's investigation abuses of D.C.'s Certified Business Enterprise program.
EEC owner Andre Downey didn't respond to a request for comment.
According to the District's lawsuit, EEC and Forrester ran two more fraudulent joint ventures together. The first started in 2008, when the two applied together for a contract on the Department of Employment Service's new headquarters. On documents submitted to District regulators, EEC agreed to receive 51 percent of the profits and do 50 percent of the work, as required by CBE rules. Helped by the EEC's CBE status, their joint venture won the project.
But the District claims that secret documents between the companies told a different story. Two months after their DOES joint venture was certified, Forrester and EEC allegedly agreed to new terms that cut EEC's profits to just 5 percent of the profits without telling CBE program administrators in the Department of Small and Local Business Development. In exchange for its much bigger cut of the profits, Forrester would do nearly all the work on the project. DSLBD would never have certified the joint venture if it knew EEC was working for such disadvantageous terms, according to the lawsuit.
The companies allegedly pulled a similar post-certification agreement change in 2009 for a joint venture for a contract on Ward 1's Senior Wellness Center.
Photo by Darrow Montgomery