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New Jersey Contractor Settles Allegations of DBE Fraud

On November 1, 2018, Kiewit Constructors, Inc. (Kiewit), a New Jersey-based construction company, entered into a civil settlement agreement with the U.S. Attorney’s Office, District of New Jersey. Kiewit agreed to pay $1.87 million to resolve allegations that it improperly reported Disadvantaged Business Enterprise (DBE) participation on a federally funded construction project.
In 2009, Kiewit entered into a $63.8 million contract with the New York State Metropolitan Transportation Authority’s (MTA) Long Island Rail Road (LIRR) to design and implement phase II of the Atlantic Avenue Viaduct Rehabilitation Project. The Atlantic Avenue Viaduct is an approximately 1.5-mile bridge that connects Queens and Brooklyn in New York. Kiewit’s work included furnishing and installing new steel girders and spans, along with related steelwork.
The LIRR required its contractors to subcontract with DBEs and established DBE goals to ensure the contractors made “good faith efforts” to achieve those goals. Kiewit entered into an approximately $11.9 million subcontract with Iron Eagle Construction Corp., a then DBE-certified steel erection company, to furnish and install steel spans. The United States asserts that Kiewit did not take contractually mandated steps to address Iron Eagle’s failure to perform a commercially useful function and that it failed to meet its DBE obligations under the contract.
DOT-OIG conducted this investigation with the Port Authority of New York and New Jersey-OIG and MTA-OIG.