BOSTON – Walsh Construction Company (Walsh) and Melo’s Rodbusters, Inc. (Melo’s) have agreed to pay $1.24 million collectively to resolve False Claims Act allegations that they participated in a fraudulent scheme designed to take advantage of the Disadvantaged Business Enterprise (DBE) program in connection with their work on the federally funded Whittier Bridge/I-95 Improvement Project.
Walsh, an Illinois corporation, is a general contracting and construction management firm. Melo’s is a Massachusetts corporation and a certified DBE that subcontracted with Walsh on the project to perform furnishing and installation of steel rebar.
The DBE program provides opportunities for businesses owned by socially and economically disadvantaged individuals to work on projects financed by the federal government. The program requires contractors to award, or make good faith efforts to award, a percentage of subcontracts on a given project to DBEs that serve a “commercially useful function.” A DBE does not serve a commercially useful function if it acts as a mere pass-through—that is, a DBE through which funds are passed to create the appearance that historically disadvantaged persons did the work, when they did not. Companies regularly certify their compliance with the DBE regulations when making claims for payment on federally funded contracts.
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