9 Investigates: Paving company costing taxpayers $2M, according to NCDOT

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CHARLOTTE, N.C. —

A local paving company, under federal investigation for government contract fraud, is also costing taxpayers nearly $2 million extra in local road projects, according to North Carolina Department of Transportation records.

Boggs Paving Company, based in Monroe, is big business in Union County and throughout North Carolina. In Union, Anson and Richmond counties alone, NCDOT records show Boggs Paving has been NCDOT’s paving company of choice in 37 different contracts, totaling millions of dollars in revenue for the company.

City officials in Monroe said Boggs has a reputation for often being the lowest bidder, including a project in 2011 to relocate part of Gold Mine Road and lengthen a runway at the airport.

“We put out to bid, and a lot of times they’re the lowest bidder, and it’s been like that for a long time,” city spokesman Pete Hovanec said.

That long relationship turned sour, however, after city officials said the runway construction took 325 days longer than estimated, causing traffic delays for drivers, detours for residents, and costly overtime for off-duty police officers to patrol the project area.
Monroe city officials said after the project was completed, Boggs Paving sent the city a bill for $2.7 million more than the original bid.

City council later voted to hire a consulting firm just to oversee Boggs' work, which officials told Channel 9 has cost taxpayers an additional $3.5 million over the past several years.

When the next project at the airport came up for bid, city council members voted to award the bid to the second lowest bidder, Blythe Development Company.

NCDOT aviation officials then sent city leaders a letter, telling them they had to hire the lowest bidder on the project, Boggs Paving, or NCDOT would not allow the airport to access state and federal grant funds.

“The state said, more or less, if you don’t use Boggs, you’re not gonna get that money,” Hovanec said.

Channel 9 shared that letter, as well as other NCDOT records, with UNC School of Government professor Norma Houston.

Houston, who is an expert in public contract law and state government, told Eyewitness News she had no knowledge of any legal statute that would apply to NCDOT and FAA’s decision.

“I’ve never heard of that before,” Houston said. “I’m at a loss as to explain why the city was told they had to award to one particular contractor.”

Houston said under state law, Monroe city officials should have been able to hire a different contractor if they were able to demonstrate to NCDOT with sufficient evidence that Boggs was not a qualified, responsible bidder.

“For example, did they submit a lot of change orders? Were there a lot of delays in the project? What were the actual payments to the contractor?” Houston said.

In an email Friday morning, NCDOT officials told Channel 9 because Monroe and Boggs Paving were involved in a lawsuit at the time of the bid controversy, they could not decide if Boggs was a non-responsible bidder.

NCDOT also said they made that decision under guidance from the NC Attorney General’s office and the FAA.

Channel 9 dug through NCDOT transportation records that show Boggs Paving has been paid $1.7 million more than its initial bids in the past decade in North Carolina. Many of those projects were delayed by months.

“The degree which one single contractor is repetitively winning bids, could potentially raise a question about that contractor's bidding practices,” Houston said.

NCDOT officials refused multiple requests for an on-camera interview, but maintain they do not practice favoritism or partiality. In a statement, a spokesman said, “NCDOT strives to maintain safety, efficiency and integrity toward every delivered contract and project, while adhering to federal and state laws and regulations that outline the bidding process.”

In regard to Boggs’ performance on some projects, NCDOT said, “Project delays could be due to inclement weather, additions or changes to the scope of the project, or site conditions varying from what is shown on design plans. Some reasons for paying more than the bid amount are overruns in estimated quanitities and work items, or there may be an adjustment clause in a contract for fluctuations in fuel and/or asphalt costs.”

NCDOT continues to work with Boggs, despite a federal indictment in 2013 alleging Boggs CEO Drew Boggs and three other men conspired to defraud the state and federal government out of $87 million in contracts.

In a statement, NCDOT said, “Boggs Paving has been indicted but not convicted of any charges, and there is not a state law that says the contractor has to be removed from a project. Our legal staff is engaged with federal authorities, remaining observant for any new developments. Should anything change, our legal team will advise what necessary action must be taken moving forward.”

Boggs CEO Drew Boggs also did not respond to multiple requests for an interview about his company’s bidding processes and work history.

Experts said the bottom line in the contract bid game is who it hurts the most.

“Ultimately, it’s the taxpayer who loses, because all of these contracts are paid for with taxpayers dollars,” Norma Houston said.

Read our past coverage:

Paving company in heap of trouble over dirt dump

Monroe paving company faces federal fraud, money laundering charges

5 indicted in alleged scheme to defraud the government in paving contracts

Paving company facing federal fraud charges recently awarded multimillion-dollar contract

Company indicted on charges of taking $87M from government

Two accused of large embezzlement scheme against Boggs Paving