Firm settles in minority-contracting case

Posted: October 26, 2012

A firm accused of creating sham transactions to get around minority-contracting rules has agreed to settle an investigation by Philadelphia's inspector general by paying $128,000 and agreeing to a two-year ban from city work.

William Betz Jr. Inc., a local heating and plumbing supply company, admitted no wrongdoing in Wednesday's settlement.

In January, Inspector General Amy Kurland said three companies - Betz, JHS & Sons Supply Co., and UGI HVAC Inc. - colluded to make it appear that JHS, a city-certified minority vendor, provided equipment and supplies for a government-funded weatherization project.

UGI held the prime contract for the weatherization. A UGI subsidiary had agreed to work toward its minority-contracting goal by buying boilers, furnaces, and chimney liners through JHS. Instead, UGI bought the products from Betz, which paid 3 percent to JHS.

"Betz has voluntarily accepted the sanctions that would have been imposed on the company if it had not made a good-faith effort to resolve this matter. We appreciate their cooperation," Kurland said.

She said the investigation is ongoing, as the city identifies other companies that had subcontracting relationships with Betz.

The settlement also requires Betz to disclose, on its storefront signage and on sales-related documents, that it is prohibited from selling supplies to companies that plan to use those goods in work performed for city contracts.

In a statement, company president Rudy W. Betz Jr., grandson of the founder, said, "We are pleased to report that we have resolved our disagreement with the city of Philadelphia, are free to continue to focus on offering the same top-notch supplies and service that we always have."

In January, the city entered into a $100,000 settlement agreement with UGI HVAC Inc. and removed JHS & Sons from its list of certified minority businesses.

William Betz Jr. Inc. will be eligible to do business with the city again in October 2014. The company has offices in Philadelphia and in Lester, Pa.

Contact Miriam Hill at 215-854-5520, or @miriamhill on Twitter.

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