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Contractor With History of Defrauding MTA Wins $80M Agency Deal

By Gwynne Hogan | December 20, 2016 7:38am
 Schiavone Construction Co was awarded an $80.6 million contract for repairs to the M train
Schiavone Construction Co was awarded an $80.6 million contract for repairs to the M train "Bushwick Cut," pictured above.
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DNAinfo/Gwynne Hogan

BUSHWICK — A contractor with a  history of defrauding the MTA has scored an $80 million contract with the agency.

Schiavone Construction Co. has been partly blamed for delays at the Second Avenue subway line, accused of worker safety violations and had to pay $20M to the government in 2010 after it lied about hiring women and minority owned businesses.

Yet it won the backing of MTA board members for a multi-million dollar deal to rebuild the Bushwick Cut, a spur of the M train line just north of Broadway in Bushwick.

The MTA recently approved the contract, according to board documents published Dec. 12.

Schiavone Construction Co., whose representatives didn't respond to a request for comment, undercut their closest competitor Kiewit Infrastructure Co. by $10 million in the competitive bidding process, according to the MTA.

"The [selection committee] unanimously ranked Schiavone as the most technically qualified firm and unanimously recommended it for award based on the selection criteria," the document reads.

They "provided the best value to NYC Transit."

"Schiavone brings a history of timely and/or accelerated performance of similar work in confined spaces," the document reads.

Schiavone has more than a half a century of experience in the industry and has earned hundreds of millions of dollars in government contracts over the years, including $350 million to reconstruct Times Square and South Ferry subway stations.

But in 2010, the company was forced to pay $20 million to the government after a federal investigation revealed it had breached its contract with the MTA by pretending some of its subcontractors were minorities and women — which is required by the MTA.

In 2005, the company was linked to a scheme in which workers at Schiavone were recorded by an informant plotting to hire subcontractors that were posing as minority and women owned business.

In fact they were fronts for mob owned businesses, according to a 2005 affidavit filed in federal court as part of an organized crime probe and reported by the New York Times

No formal were charges were filed against the company in that case.

In its current work on the Second Avenue subway line, a contract it shared with two other companies, the three firms were cited for a slew of worker safety issues including lacking proper fall protection and training requirements and allowing workers to be exposed to gas, vapors or mists without proper respiratory protection, according to records from the Labor Department's Occupational Safety and Health Administration.

And a goof on the part of the trio in which they incorrectly set up dynamite in 2012 led to an explosion that rocked the Upper East Sidethe Daily News reported.

When asked about the company's track record, MTA spokesman Kevin Ortiz said, "NYC Transit has performed a thorough background check on Schiavone and finds them to be a responsible contractor."

For the Bushwick Cut reconstruction, Schiavone is required to subcontract 15 percent to minority-owned and 15 percent to women-owned businesses, according to the MTA.

When asked how the MTA would assure that Schiavone upholds the latest contract's requirement, spokesman Ortiz said, "We hold all of our contractors accountable."