State officials were so wary last year of a Uniondale engineering firm under investigation by the state attorney general that it required the company to hire an outside monitor to oversee its work and banned its president and vice president from involvement in two proposed contracts totaling $2.45 million.
The state Department of Transportation also warned Gibbons, Esposito & Boyce Engineers, which also does work as GEB HiRise and is affiliated with HiRise Engineering Inc., that it reserved the right to amend or rescind the contracts “if HiRise is indicted, charged or convicted of any crime or violation of any federal or state false claim act as a result of state or federal governmental agencies investigation,” according to a September 2015 DOT letter to the company’s attorney.
The state awarded the contracts for inspection of bridge maintenance repairs in Queens and construction inspection in Brookhaven Town after GEB president Joseph Celentano and vice president Robert Ervolina agreed to the conditions.
DOT spokeswoman Jennifer Post said the agency is reviewing the contracts after Attorney General Eric T. Schneiderman last week charged HiRise with multiple felonies for allegedly forging engineering reports about superstorm Sandy damage in a scheme to cheat homeowners who filed flood insurance claims. The firm has denied the charges.
This week, the U.S. Department of Homeland Security suspended HiRise Engineering from receiving any future government contracts, fellowships, loans and other government benefit programs for at least a year.
Post said she expected DOT to decide within several weeks whether to take any action. “As is standard practice, our review will take into account any suspensions or debarments,” she said. To date, Post said, GEB’s work for the department “has been satisfactory and there have been no issues.”
GEB’s attorney Kenneth C. Murphy said Wednesday that the company “is cooperating fully with the Department of Transportation.” He added, “The contracts are with GEB, not with HiRise. GEB has been in existence for more than 40 years and has done quality work for state and local governments. We fully intend to cooperate with whatever the Department of Transportation needs.”
The DOT review was triggered by the attorney general’s raid of “the office of GEB Engineers and its affiliate firm, HiRise Engineering,” in February 2015 and by an inquiry by the Federal Emergency Management Agency, according to the ten-page state determination letter. “The above mention investigation raised questions as to whether GEB could be considered a responsible bidder,” the letter explained. After imposing its conditions on GEB, the review team concluded the company was eligible to be awarded the work.
Although DOT’s contracts are with GEB, the firm shares the same offices and the same president with HiRise and GEB HiRise. The firm names are used interchangeably in Nassau County contracts with Gibbons, Esposito & Boyce and all three HiRise firms are listed on an insurance certificate provided to the county for Sandy-related work.
After Schneiderman’s actions last week, Nassau Comptroller George Maragos refused to approve a new $1.5 million contract with GEB and suspended about $50,000 in claims from the firm.
“We don’t think it appropriate for the county to be doing business with a company under indictment,” Maragos said Wednesday. He said his office will audit the GEB’s work “before we approve those payments so that will be a while.”
From 2011 through early 2015, Nassau paid the company $4.7 million for various contracts, including construction management. The county had designated GEB as the “independent” monitor of Nassau’s federally reimbursed waterways debris removal. The main contractor for that work, VIP Splash Waterways Recovery Group Inc., is under federal investigation.
Nassau provided Newsday with the DOT letter. Deputy County Executive Ed Ward said Nassau had received it from GEB as the county “was doing its due diligence” in deciding whether to award new work to the firm. He said Nassau adopted the same clause used by the state to allow the county to amend or rescind its contract with GEB if charges were filed against HiRise.