A Hayward-based company has been slapped with a $250,000 penalty to settle accusations of providing phony parts for a Bay Area Rapid Transit (BART) rail expansion project, as disclosed by the Department of Justice. HSQ Technology, a subsidiary of the construction juggernaut RailWorks Corporation, admitted to buying unapproved network communications equipment from unauthorized online distributors and slipping the gear into the Santa Clara Valley Transportation Authority’s Silicon Valley Berryessa Extension Project.
The authorities say that HSQ, bound by a subcontract signed in 2012, was supposed to stick to authorized distributors for its networking hardware but flouted these rules. They bought some equipment off the web without the VTA's consent—a big no-no given that the project's funding included federal grants from the U.S. Department of Transportation's Federal Transit Administration.
Special Agent-in-Charge Cory LeGars, with the ominous task of policing such federal grant compliance, issued a stern warning. "Government contractors are expected to adhere to the contractual obligations to which they agreed and for which they have been paid," LeGars said, according to a statement by the DOJ. The settlement underlines the government's determination to keep its contractors in line.
From 2015 to 2016, HSQ handed in eight payment claims for dodgy gear without the paperwork to back up their authorized origins. U.S. Attorney Ismail J. Ramsey emphasized the government's muscle against such shenanigans, deploying the False Claims Act to strike at the heart of contractor fraud. "This Office will continue using the False Claims Act to address fraudulent conduct by government contractors, subcontractors, and suppliers," Ramsey affirmed via the U.S. Attorney's Office, Northern District of California press release.
The case was a team effort, with Assistant U.S. Attorney Emmet P. Ong taking point backed by Jacqueline Hollar and Garland He. While HSQ has to cough up the quarter-million-dollar settlement, they have not been officially found liable – the allegations remain allegations, albeit costly ones for the company. Anyone sniffing out more potential fraud concerning federal dime is encouraged to bark up the tree of DOT OIG's fraud hotline.
