(IND) PGW contractor to pay $2M for overcharging

PGW reached a $2 million no-fault agreement with Danella Companies Inc.

After coming under fire for overcharged materials and paving jobs, Danella Cos. Inc. has reached a no-fault agreement with the City of Philadelphia and Philadelphia Gas Works on Tuesday.

The Plymouth Meeting-based company, which denied any wrongdoing as part of the agreement, will pay more than $2 million to the city and PGW to settle claims, according to an official settlement from the mayor’s office.

“This agreement sends a clear message to contractors that the City of Philadelphia will not tolerate being overcharged,” said Mayor Michael Nutter.

Danella, which had been doing business at the time as Danella Construction Corp., had contracts valued at more than $22 million with PGW to reconstruct and pave city streets in an effort to replace aging underground cast iron pipes with updated polyethylene pipe.

An Office of the Inspector General investigation, which analyzed about 400 core samples from paving work at various project since 2010, showed discrepancies in the amount of construction paving material Danella billed and the amount of material the company actually used.

A review of the Danella’s invoices also showed that the company, by failing to provide the required amount of concrete and asphalt specified in the paving contracts, overbilled PGW by about $1.84 million for construction materials not installed.

As part of the settlement, the company has agreed to pay the $1.84 million back to PGW plus pay a penalty of $525,000 to the city. Danella also agreed to enhance its corporate compliance program to avoid future shortages, guaranteeing the work for three years against any problems as a result of the shortages.

“This settlement is a win for PGW ratepayers,” said Craig. E. White, PGW president and CEO. “It means that we can dedicate every dollar possible to upgrading our infrastructure while keeping rates low for our customers."

Source: Philadelphia Business Journal