Fairfield Hills Management Company

Nearly Duped In Bid Scheme

By John Voket

The management company that oversees Fairfield Hills was among those named as potential victims in a bid-rigging scheme that was revealed this week.

DeMarco Management Corporation sought bids from B-G Mechanical Services, Inc. formerly of Connecticut, and was supplied with two other bids without knowing those two competitors conspired with the initial company to submit falsely inflated proposals to ensure B-G Mechanical came out the lowest bidder, subsequently receiving the award.

The scheme involved property managed by DeMarco for the State of Connecticut in Hartford. The firm’s work at Fairfield Hills was not affected by the alleged bid rigging.

Attorney General Richard Blumenthal and Department of Consumer Protection (DCP) Commissioner Edwin R. Rodriguez announced a settlement and a major lawsuit involving the industrywide illegal bid rigging in the heating, ventilation, and air-conditioning (HVAC) business over the course of several years.

Customers harmed by the alleged scheme include CTTransit, the State of Connecticut, Vernon Waste Water Pollution Control Authority and others, the commissioner and Attorney General said during an October 23 press conference.

B-G Mechanical Services, Inc, which has since relocated from Connecticut to Massachusetts, will pay $280,000 to settle allegations it orchestrated bid rigging schemes from at least 1997 through 2004. The bids involved HVAC services contracts on behalf of state and municipal entities, and private companies.

Mr Blumenthal also filed a lawsuit against others who participated in the bid rigging — Link Mechanical Services, Inc (LMS) of New Britain and owner Christopher Link; Industrial Steel & Boiler Services, Inc (ISB) of Massachusetts and its part owner, William O’Neil; former B-G president John Haggett and B-G current employees George Pelletier and Francis J. Fallon.

“An industry rife with bid rigging needs strong repair,” Mr Blumenthal said. “B-G Mechanical conspired with other companies to manufacture a fictional marketplace leading consumers to trust an illusory competitive field when, in fact, there was none. This company and colluding competitors imposed a stranglehold on the market by subverting the bid process. This pervasive practice undercut competition — robbing consumers and competitors of free choice.

“B-G Mechanical is doing the right and responsible thing by settling — and continuing to cooperate with my ongoing investigation, Mr Blementhal said.”

Commissioner Rodriguez said these types of illegal bids are what drive up the bill for taxpayers and consumers alike in additional costs to fund public projects.

Mr Haggett allegedly conceived and implemented the bid rigging schemes with his staff, either concocting false bids — or “cover bids” — on competitors’ letterhead and then submitting them to customers along with B-G Mechanical’s bids, or requesting that his competitors submit bids directly to the customers at prices higher than B-G Mechanical’s.

The Attorney General’s lawsuit seeks civil penalties and an order prohibiting future bid rigging and collusion.

Most of the bids involved yearlong contract maintenance agreements (CMAs) to provide preventative maintenance and service for a set price. These contracts were often worth more than the face value of the contract because customers often used the CMA vendor for any additional repair work above and beyond the contract.

Over the course of at least six years, at least 15 bids were rigged, including bids for HVAC-related work for the State of Connecticut solicited by the DeMarco Management Corporation for state-owned property that it manages at 21 Grand Street, Hartford. B-G Mechanical submitted its own bid, and arranged for two more cover bids from its competitors. B-G Mechanical positioned itself as the lowest bidder to win a $21,850 contract. The state ultimately decided against awarding a contract at that time.