Press Release  Canton-based Mechanical Contractor to Pay $380,000 to Settle False Claims Allegations

BOSTON — A Canton-based mechanical contractor has agreed to pay $381,700 to resolve allegations it falsely certified compliance with equal opportunity and personnel requirements on a contract with the state Division of Capital Asset Management and Maintenance (DCAMM), Attorney General Maura Healey announced today.

 The assurance of discontinuance, filed in Suffolk Superior Court, alleges that ENE Systems, Inc. (ENE) violated the state’s False Claims Act and consumer protection laws by failing to meet participation goals for Minority/Women Business Enterprises (M/WBEs) set forth in its contracts with DCAMM. The AG’s Office also alleges that ENE falsely represented that it complied with DCAMM’s requirement that it have a project manager on site for 40 hours a week. 

“This contractor ignored an important program designed to ensure that minority- and women-owned businesses have an opportunity to engage in government work,” AG Healey said. “My office takes these cases seriously and we will do everything we can to protect this vital program.”

After investigating ENE’s work providing mechanical systems maintenance for certain state office buildings, the AG’s Office alleges that ENE knew the M/WBE subcontractors it selected to meet the contract’s participation goals would not be able to complete the work assigned to them. ENE did not report these challenges to DCAMM and, ultimately, met less than 13 percent of its goal for M/WBE participation from 2014 to 2019.

The AG’s Office also alleges that ENE falsely represented that it had a qualified, full-time project manager on site 40 hours a week. Instead, the assigned project manager, at times, failed to work 40 hours per week and ENE did not have a suitable replacement when he was absent. Despite this, ENE continued to bill DCAMM for a full-time project manager.

State and federal laws establish programs to promote equal opportunity in public contracts by requiring provisions that ensure a certain percentage of jobs go to minority- or women-owned businesses. In general, certain public contracts contain provisions requiring that not less than a certain percentage of the contract be performed by M/WBEs, and bidders must agree to meet these percentages as a pre-condition of receiving a contract. Failure to comply with the provisions can result in a loss of the contract or damages.

Under the terms of the assurance of discontinuance, ENE will pay $300,000 to the state. ENE has also agreed to waive $81,712 being held by DCAMM related to ENE’s failure to meet its M/WBE participation goals.

Going forward, ENE is required to have a bid manager for each bid it submits to a political subdivision of the state. The bid manager will be responsible for reviewing the requirements of the contract prior to ENE submitting its bid, and for determining whether ENE can meet the terms. ENE will also have a contract manager for each new or existing contract it is awarded by a political subdivision. The contract manager is responsible for determining if the company can meet its contractual obligations on a quarterly basis and developing a remediation plan to bring it into compliance, if necessary. The company has also agreed to undertake annual internal reviews of its compliance with its M/WBE requirements.

AG Healey’s False Claims Division works to safeguard public funds by ensuring that companies and individuals that seek to obtain government contracts or funds maintain high standards of integrity. The Division prosecutes a range of cases involving violations of the state’s False Claims Act. Today’s settlement marks the seventh resolved case involving M/WBE fraud.  

The case was handled by Assistant Attorney General Cassandra Arriaza, of AG Healey’s False Claims Division, with assistance from Kevin McCarthy, Director of AG Healey’s Civil Investigations Division and Amy Crafts, Chief of the False Claims Division.

###