Press Release  Bridge Contractor to Pay $700,000 to Settle Allegations of Overbilling MassDOT

BOSTON — NEL Corporation (NEL), a Middleton-based bridge repair and maintenance contractor, has agreed to pay $700,000 to resolve allegations that it knowingly overbilled the Massachusetts Department of Transportation (MassDOT) to repair and maintain bridges throughout Greater Boston, the South Shore, and the Cape and Islands. The terms are included in an Assurance of Discontinuance 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 (OIG) Internal Special Audit Unit for MassDOT (ISAU) and Civil Recovery Unit (CRU) found that NEL continually overbilled MassDOT under contracts for bridge repair and maintenance. The contracts included items that NEL was required to provide, including certain tools and equipment, personal protective equipment, sanitary facilities and other items. Instead, NEL knowingly charged MassDOT for these items, resulting in a windfall for NEL.

As part of this settlement, NEL agreed to implement measures to prevent future overbilling, including designating a contract manager to ensure that the company only bills MassDOT for work, supplies and equipment allowed under the contract. In addition, NEL must hire an outside auditor to annually review NEL’s billing on all open MassDOT contracts. These measures remain in effect for five years. 

“NEL knowingly overbilled MassDOT thousands of dollars for years, forcing the state to pay double for incidental items the contractor itself was responsible for,” AG Healey said. “Contractors who do business with our public agencies have a duty to operate with honesty and integrity, and we will hold accountable those who don’t.”

Inspector General Glenn A. Cunha said, "A contract is a binding agreement. State contractors must only bill for costs allowed under the contract. As this settlement shows, we will not tolerate companies charging the state for materials or equipment they were obligated to provide themselves under the contract."

The OIG also received assistance from MassDOT’s Highway Division and Office of General Counsel during its investigation.

“MassDOT was pleased to work with the Office of the Inspector General and Attorney General’s Office on this case and we are appreciative of this outcome,” said MassDOT Highway Administrator Jonathan Gulliver. “MassDOT has recently strengthened our contract language to ensure that billing procedures cannot be exploited like this in the future. We thank Attorney General Healey and Inspector General Cunha and their teams for their assistance on this matter and look forward to our continued work to ensure that all MassDOT contracts are performed in a fair and equitable manner.”

The ISAU, including Director Emily Pedersen, Deputy Director Ashley Amado, Investigator David Castelluccio and Associate Counsel Carolyn McMenemy, conducted the investigation into NEL’s billing. The ISAU prevents, detects and corrects fraud, waste and abuse in the expenditure of public and private transportation funds.

Also contributing to this settlement were William Durkin, Lead Counsel of the CRU, and Meghan MacKenzie, CRU Associate Counsel, working in collaboration with Amy Crafts, Chief of Attorney General Healey’s False Claims Division, and Assistant Attorney General Cassandra Arriaza, also of the AG’s False Claims Division.

AG Healey created her office’s False Claims Division to safeguard public funds and promote integrity and accountability in public contracting. As part of its efforts, the AG’s False Claims Division works collaboratively with the OIG’s CRU to pursue civil actions to recover public funds lost due to fraud, false claims and other wrongful conduct. AG Healey urges anyone with information about suspected fraud or abuse relating to state or municipal contracts or funds to contact the False Claims Division’s tip line at 617-963-2600. The OIG also operates a hotline for reporting fraud involving public funds or property at 800-322-1323 or IGO-FightFraud@state.ma.us.

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