News

March 20, 2008

Prison may have overpaid contractor

Firm was paid over $78,000 for work that should have been under flat-fee contract.

By Terrie Morgan-Besecker tmorgan@timesleader.com
Law & Order Reporter
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WILKES-BARRE – A company that has done more than $1.2 million in repairs at the Luzerne County prison appears to have overbilled the county at least $78,235 for work that should have been covered under a flat-fee contract.

Warden Gene Fischi on Wednesday said it appears Valley Testing and Balancing of Conyngham charged the county twice for a base service contract the prison approved in May 2005 to provide heating, plumbing, air conditioning and other maintenance services at the prison.

Records from the county controller’s office show the firm was paid $78,235 on July 26, 2005, which, according to the invoice, was supposed to be a partial payment toward the total contract cost of $82,365.

But records show the credit was not applied to a second bill the firm submitted on March 30 for $82,365. That entire amount was paid by the county on April 10, 2006.The issue was brought to Fischi’s attention on Wednesday by a Times Leader reporter who had reviewed dozens of bills submitted by Valley Testing since 2005.

Fischi said he intends to meet with county solicitor James Blaum today to go over records to determine if overpayments were made.

Asked to explain why neither he nor anyone else from the prison caught the discrepancy, Fischi struggled to provide an answer.

Fischi said he knows nothing about heating and air conditioning. He had relied on the prison’s former maintenance supervisor, John Roke, who is now deceased, to review and approve the invoices.

“If my job is to sit down and go over the contract, I wouldn’t know what to ask,” Fischi said. “I’m just checking it with my line item on my budget.”

Current maintenance supervisor Ed Lukowski said he had no involvement in reviewing the invoices.

Frank DeGaetano, owner of Valley Testing, did not immediately return a phone message left at the business late Wednesday afternoon.

The bills ultimately are approved by the controller’s office. Commissioner Chairwoman Maryanne Petrilla, who served as controller until 2007, has said previously her office matches purchase orders signed by department heads to make sure the work was authorized, but does not scrutinize the appropriateness of each bill.

The paper’s review also raised questions regarding the level of diligence the prison employed in reviewing and approving bills the company submitted.

For instance, there were at least eight bills totaling $22,674 that had the word “contract” stamped on the invoice.

Fischi said Wednesday he does not know why “contract” was stamped on the bills but believes it indicates the particular work performed was supposed to be covered under the $82,365 flat-fee contract. Records show Valley Testing was paid separately for those bills.

In other instances, the company submitted bills listing a flat fee, but did not break out materials and labor or provide a breakdown of the labor rate or number of hours expended.

On March 29, 2006, for example, the company billed the county $227,170 for emergency repairs and replacement of a computer and work station. The payment, which was made from the county’s bond, gives the total but does not break out the cost of the equipment and labor.

There is also some question regarding whether other basic heating, plumbing and air conditioning work the company performed should have been included in the flat-fee contract.

The contract approved by the board in 2005 called for the company to evaluate the entire heating and air conditioning system and to set up and calibrate instrumentation that controls the system.

An invoice the company submitted for the contract described it as “base service on HVAC systems and facility controls.” But the contract itself, which is a single page long, is vaguely worded and does not specifically state what, if any, repair work is or is not included.

The controller’s records show that since 2005 the company has billed the county for $1,128,943 in services beyond the flat rate contract fees. Roughly $693,000 was for emergency repairs made to security systems that were damaged by a storm in December 2006.

Commissioner Stephen Urban has repeatedly questioned why Valley Testing has remained the maintenance provider given that its contract with the prison expired on Dec. 31, 2005.

The contract was not bid out after then, as would be required by state law. The law mandates a county seek bids for any contract that exceeds $10,000.

County commissioners have recently vowed to be more diligent in ensuring bids are sought for any items or services that exceed the bidding threshold.

It was unclear Wednesday whether that promise will impact Valley Testing.

The company is in the midst of completing major security repairs that began last year. Commissioners have said they are not sure if they should, or could, award the completion of the work to another company because Valley Testing has already ordered special-made parts.

Terrie Morgan-Besecker, a Times Leader staff writer, may be reached at 570-829-7179

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