Butkovitz’ Investigation Uncovers Non-Compliance with Minority Contract Requirements

Audit Date: August 6, 2010
Audit Categories
  • Investigation
Controller: Alan Butkovitz

Executive Summary

For Immediate Release:
Aug. 6, 2010

Contact: Harvey Rice

Butkovitz’ Investigation Uncovers Non-Compliance
with Minority Contract Requirements

Ernest Bock and Sons failed to utilize minority subcontractors
on $36 million airport project

Click here to view the Controller’s report

PHILADELPHIA – City Controller Alan Butkovitz released a special investigative report into a $36 million Division of Aviation contract that found the contractor failed to comply with the mandatory minority business provisions of this contract.

Ernest Bock & Son’s, Inc. (EBS) was awarded a $36 million contract by the Division of Aviation as part of the expansion project at the Philadelphia International Airport’s terminals D and E. EBS submitted a bid with 12.3 percent minority firm participation commitment and 3.3 percent participation commitment by women-owned firms. The Controller’s investigation found that EBS had only a 1.3 percent level of minority participation.

According to Butkovitz, “Our investigation revealed a ‘bait- and- switch’ approach in which Bock and Sons were awarded a contract due in part to their minority participation commitments but failed to utilize minority vendors according to the commitments that were bid.”

The Controller’s investigation found that after the City awarded the contract to EBS as the lowest bidder, the firm reduced or eliminated its pledged commitment and utilization of minority businesses on the project.

“We believe EBS would not have been awarded this contract if its bid included the level of minority participation that it actually ended up using,” said Butkovitz.

According to Butkovitz, “The Office of Economic Opportunity is responsible for reviewing compliance with the City’s Anti-discrimination policy and the Division of Aviation is accountable to the businesses who are awarded their contracts.”

“Both agencies need to devise and implement better verification and enforcement procedures for improved monitoring of City-funded contracts and minority participation levels,” said Butkovitz.

The Controller’s investigation has been referred to the proper legal authorities for investigation and appropriate action.