Settlement includes $128,000 payment, a two-year contracting hiatus and additional terms
Philadelphia, October 24, 2012– The City of Philadelphia signed a no-fault settlement agreement with William Betz Jr. Inc., a local heating and plumbing supply company, for its involvement in circumventing minority-business requirements and anti-discrimination policies for at least 15 City contracts. According to the settlement, William Betz Jr. Inc. will not participate in any contracting with the City for 24 months, will pay the City $128,000 and will comply with the provisions of an Equal Opportunity Procedures Policy.
“The agreement between the City and Betz achieves the objectives my office wanted from this case,” Kurland said. “Betz has voluntarily accepted the sanctions that would have been imposed on the company if it had not made a good faith effort to resolve this matter. We appreciate their cooperation.”
According to the agreement, Betz will pay the City $128,000, in full, within a 90-day period. The agreement also stipulated the following:
- Betz and all related entities will refrain from performing work for the City and bidding on City contracts for 24 months, effective October 23, 2012.
- On storefront signage and on key sales-related documents distributed to its customers, Betz must disclose that it is prohibited from selling supplies to companies that plan to use those goods in work performed under contract with the City.
- On October 23, 2014, Betz will again be eligible to participate in City contracts but must comply with the terms of an Equal Opportunity Procedures Policy (EOPP).
Under the EOPP, all of Betz’s sales transactions must be “arms length.” This provision prohibits Betz from negotiating arrangements between prime contractors and disadvantaged subcontractors that are certified by the Office of Economic Opportunity (OEO) as minority-, women- or disabled-owned business entities (M/W/DBEs). Betz may direct customers to the OEO Registry of M/W/DBEs if they are seeking a certified subcontractor to perform a Commercially Acceptable Function, as defined in the City’s anti-discrimination policies.
Additionally, the EOPP contains the following provisions:
- Within 30 days of the EOPP’s adoption, Betz must provide at least one hour of training to all of its sales employees to ensure compliance with both the EOPP and the City’s antidiscrimination policies. Betz must review the program annually and update its training to reflect any changes in the City’s anti-discrimination policies.
- Within 90 days of the EOPP’s adoption, Betz is required to issue a report to OEO summarizing the implementation process of the agreement.
- A compliance manager at Betz will be responsible for communicating the terms of the EOPP to sales staff on a monthly basis. The manager will also be responsible for reporting noncompliance to the OIG, the Procurement Department and the OEO.
If Betz does not fulfill the terms of the agreement, the City reserves the right to pursue civil action to ensure compliance.
In a case summary released in January, the Office of the Inspector General established that William Betz Jr. Inc., JHS and Sons Supply Company and UGI HVAC Inc. colluded to make it appear that JHS, a City-certified minority vendor, had provided equipment and supplies for a government-funded weatherization project when JHS was paid only for the use of its name and minority certification.
As a result, the City entered into a $100,000 settlement agreement with UGI HVAC, Inc. and removed JHS and Sons from its list of certified minority businesses on January 12, 2012. The City also began debarment proceedings against William Betz Jr. Inc. but has withdrawn the notice after further negotiations and agreeing to the earlier mentioned terms.