Contractor to reimburse PGW $2M for overcharged work

Posted: January 09, 2014

A SUBURBAN contractor found to have bilked the city out of millions of dollars for shoddy road work will be forking over a hefty chunk of it back.

Danella Companies Inc., of Plymouth Meeting, signed a no-fault agreement with the city and will pay more than $2 million to Philadelphia Gas Works, the Mayor's Office announced yesterday.

The Office of the Inspector General began its investigation in 2010 at the behest of PGW, which spotted discrepancies in the amount of construction paving material for which Danella billed PGW and the amount of material that was actually installed.

But Danella will continue working for the city.

"Those contracts were worth over $22 million," Inspector General Amy Kurland said. "They've agreed to a comprehensive compliance program, which will hopefully prevent any similar problems going forward."

The office took a look at Danella's invoices and found that they provided an insufficient amount of concrete and asphalt for specified paving contracts and had overbilled PGW by about $1.75 million for construction materials not installed. About 400 core samples from paving work from various projects were obtained dating back to 2010. From these samples, the Office of the Inspector General learned that the amount of concrete and asphalt that was laid was shy of what was promised.

"We don't have any comment on the details of our agreement with PGW," said John Bass, vice president of construction for Danella. "We cooperated fully with the investigation. We value our relationship with PGW and look forward to performing additional work for them."

As part of the settlement, Danella agreed to pay $1.83 million - the amount the company overcharged, plus the cost of the core samples and a $525,000 penalty. Kurland said the contractor will extend its guarantee for three years.

"There's no evidence that the streets pose any danger, and no problems have emerged at all," she said. "There could be accelerated wear and tear, and for that reason, Danella is going to indemnify PGW for three more years."

The investigation is ongoing into several other contractors that worked with PGW.

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