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Union group seeks to bar tainted company from Town of Lockport sewer project

LOCKPORT – Milherst Construction, of Clarence Center, shouldn’t be awarded a major sewer construction contract by the Town of Lockport after it admitted defrauding the state, a union-backed group contended last week.

Anna M. Falicov, general counsel to the New York Foundation for Fair Contracting, addressed the Town Board last week to urge that Milherst be denied the contract for sewer rehabilitation in the Carlisle Gardens subdivision, even though the company was the lowest of five bidders.

Passing up Milherst’s bid would mean the town would have to spend an extra $63,492 on the sewer project, Town Attorney Michael J. Norris said.

Falicov, whose group is funded by the International Union of Operating Engineers, said Milherst shouldn’t be considered because the company pleaded guilty to a criminal charge last month for defrauding the state out of nearly $80,000 in unemployment benefits.

The company admitted instructing its workers to claim unemployment insurance in the winter months, even though the employees were working on snow-removal jobs. This went on from 2007 through 2015, the Erie County District Attorney’s Office alleged in court papers.

The company agreed to plead guilty to second-degree grand larceny and repay the state Labor Department $92,077, which included $79,616 in jobless benefits. The remainder of the restitution comprised penalties imposed by the Labor Department. The plea was entered Jan. 14 before State Supreme Court Justice Penny M. Wolfgang.

All this, Falicov argued, means that Milherst shouldn’t be considered a “responsible bidder,” and that’s an important phrase, because the state law governing the award of contracts by local governments says they are to be awarded to the “lowest responsible bidder.”

The unemployment scam doesn’t have anything to do with the quality of Milherst’s work. The company has long been a fixture on the local public works scene, but so has the second-lowest bidder, Yarussi Construction, of Niagara Falls, which presumably would win the Carlisle Gardens job if Milherst doesn’t.

Milherst’s bid, including two alternate items, totaled $355,885. Yarussi’s bid was $419,377. Three other companies offered higher bids.

“We are reviewing it,” Norris said when asked if the town would hire Milherst. The board had not taken any action on the bids, which were opened Jan. 20, when Falicov contacted Supervisor Mark C. Crocker privately and then spoke out at the meeting.

The Labor Department said that there are provisions in state labor law to bar companies from bidding on public works projects for up to five years. But those provisions may not apply to the Milherst case. The ban can be imposed if a company is proven to have not paid its workers prevailing wages twice within a six-year period, or any time a company is proven to have falsified payroll records or engaged in kickbacks of wages or supplements.

“The determination of whether or not the contractor is a ‘responsible bidder’ under the law is made by the public owner letting the contract, in this case, the Town of Lockport,” Labor Department spokeswoman Tiffany L. Portzer said.