Update: This article has been updated with a statement from Contech Engineered Solutions.
Contech Engineered Solutions and Brent Brewbaker, a former executive at the company, have been indicted by a federal grand jury in Raleigh, N.C., for participating in long-standing conspiracies to rig bids and defraud the North Carolina Department of Transportation.
According to the indictment, Contech and Brewbaker conspired to rig bids for aluminum structure projects funded by the U.S. and NCDOT for nearly a decade.
The aluminum structure projects included headwalls and other structures that facilitate drainage underneath or around paved roads, bridges, and overpasses.
Contech and Brewbaker were also charged with defrauding the NCDOT by submitting bids that were falsely held out to be competitive and free of collusion, and using the U.S. Postal Service and email to carry out their scheme.
“Federal laws prohibiting bid rigging and collusion in the award of government contracts are designed to protect the taxpayers and to ensure that they get the best quality service at the most competitive pricing,” said U.S. Attorney Robert J. Higdon Jr. of the Eastern District of North Carolina.
The offense charged in count one carries a statutory maximum penalty of 10 years in prison and a $1 million fine for individuals, and a criminal fine of $100 million for corporations.
The offenses charged in counts two, three, four, five, and six each carry a statutory maximum penalty of 20 years in prison and $250,000 fines, and a criminal fine of $500,000 for organizations. The maximum fines for each count may be increased to twice the gain derived from the crime or twice the loss suffered by victims if either amount is greater than the statutory maximum fine.
According to the Department of Justice, the case is the result of an ongoing federal antitrust investigation into bid rigging and other criminal conduct in the aluminum structures industry, which is being conducted by the Antitrust Division with the assistance of the USPS Inspector General, the U.S. Department of Transportation Office of Inspector General, and the U.S. Attorney’s Office for the Eastern District of North Carolina.
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt.
In a statement, a Contech spokesperson said, "We strongly disagree with the charges made by the government about the bids Contech and its exclusive distributor and business partner submitted for certain projects with the North Carolina Department of Transportation. Despite cooperating with the government, we have been unable to resolve the legal issues and have chosen to defend our business and case in a court of law.
"This case is more complicated than the indictment suggests, and a different legal test applies than the one offered by the government. Competition was never impacted, there was no unreasonable restraint of trade, and the NCDOT did not overpay for goods and services provided. Contech also respects the bidding process, and neither the NCDOT nor the taxpayers suffered any harm financially and they continue to be a valued customer."