News  Bridge Contractor to Pay $55,000 to Settle Allegations of Overbilling

Kodiak Corporation (Kodiak), a bridge and roadway contractor, has agreed to pay $55,000 to resolve allegations that it overbilled the Massachusetts Department of Transportation (MassDOT) for bridge repair and maintenance work in Essex and Middlesex counties. Kodiak also agreed to implement measures to prevent future overbilling. The terms are included in an Assurance of Discontinuance (AOD) reached with Attorney General Maura Healey and Inspector General Glenn A. Cunha, which was filed in Suffolk Superior Court today.

An investigation by the Office of the Inspector General’s Internal Special Audit Unit for MassDOT (ISAU) found that Kodiak overbilled MassDOT under four contracts for bridge repair and maintenance. Under the contracts, Kodiak was required to provide tools, personal protective equipment, sanitary facilities and delivery charges at no additional expense to MassDOT. According to the allegations in the AOD, however, Kodiak charged MassDOT for those items, driving up the cost of the projects. On multiple occasions, Kodiak also double-billed MassDOT by submitting the same invoices for reimbursement more than once. Kodiak does not admit the Commonwealth’s allegations. 

The OIG’s Civil Recovery Unit (CRU) handled the settlement negotiations and civil recovery. In addition to paying $55,000, Kodiak must implement measures to prevent future overbilling. Kodiak must designate a contract manager who will be responsible for ensuring that Kodiak only bills MassDOT for allowable expenses going forward, and to train Kodiak employees about billing. Kodiak must also immediately notify MassDOT if it discovers any unallowed billing or overpayment. These measures remain in effect for five years.

“By billing the state for items that were its financial responsibility, Kodiak added tens of thousands of dollars in costs to these contracts, diverting public funds from other important transportation projects,” Inspector General Glenn A. Cunha said. “We will continue to ensure that contractors adhere to their agreements and hold accountable those who do not.”

The ISAU, including Director Emily Pedersen and Deputy Director Ashley Amado, conducted the investigation of Kodiak’s overbilling. The ISAU prevents, detects and corrects fraud, waste and abuse in the expenditure of public and private transportation funds.

William Durkin, Director and Senior Counsel of the CRU, and Meghan MacKenzie, CRU Lead Counsel, worked in collaboration with Amy Crafts, Chief of Attorney General Healey’s False Claims Division, and Assistant Attorney General Jeff Walker, also of the AGO’s False Claims Division.

Created in 2019, the Civil Recovery Unit pursues civil actions, with authorization from the AGO, to recover public funds lost due to fraud, false claims and other wrongful conduct. It works closely with the AGO, the OIG’s other investigative units as well as other state agencies and local governments. The OIG operates a hotline for reporting fraud involving public funds or property at 800-322-1323 or IGO-FightFraud@mass.gov.

In 2015 AG Healey created the False Claims Division to safeguard public funds by enforcing high standards of integrity against companies and individuals that make false statements to obtain government contracts or funds. Anyone with information about suspected fraud or abuse relating to state or municipal contracts or funds is urged to contact the False Claims Division’s tip line at 617-963-2600.