Washington Twp. engineering firms TesTech Inc., CESO Inc. and owners Sherif Aziz and David Oakes are facing a ban on receiving any roadway or airport contracts funded through the Ohio Department of Transportation, according to letters obtained by the Dayton Daily News.
ODOT Director Jerry Wray informed the four in a Sept. 12 letter that the “proposed debarment” action was being taken because they violated a state law that prohibits knowingly or willfully submitted false or misleading information in connection with a public contract.
Earlier this year the four were implicated in a federal contracting fraud case that resulted in a $2.9 million settlement of a False Claims Act lawsuit against them and luxury home developer Shery Oakes, who is David Oakes’s wife.
They admitted no wrongdoing in settling the allegations that Aziz served as the Oakeses’ front man to qualify TesTech for at least $5.07 million in federally funded contracts under the Disadvantaged Business Enterprise set-aside program between 2005-2009.
Both businesses have done extensive public contract work in Ohio and other states, according to their web sites. The settlement agreement said they submitted false claims on projects in Ohio, Kentucky, Indiana and Michigan.
Ohio stripped TesTech and Aziz of the DBE status in 2012. A ban would prohibit the award of any new local or state transportation contracts paid for with state or federal money.
The action could also lead to the placement of the two companies, Aziz and David Oakes on the federal “excluded parties” list, barring them from any highway and airport contracts nationwide, according to officials at the state and federal departments of transportation. Placement on the federal list can last three years. The state can bar them temporarily or permanently.
“It’s not a good thing for them,” said Montgomery County Engineer Paul Gruner, who said he refuses to use barred companies for locally funded projects as well.
Aziz and Oakes did not respond to a request for comment. Oakes’s attorney David Reed said he couldn’t comment. Columbus attorney Dwight Hurd, who has represented Aziz in matters before ODOT and was copied on the ODOT letters, declined to say if he represents any of the parties.
They have until 30 days after the letter was mailed to ask for a hearing but have not yet done so, said ODOT spokesman Steve Faulkner. If no hearing is held, Wray will decide whether to move forward with the debarment.
Faulkner said debarment is “rare but not unprecedented.” He said the state would inform the federal government of the action, and the companies are required to notify any local governments of it if they submit bids or proposals on public work.
Debarred companies often make management changes in order to resolve issues that lead to being barred from federally -funded contracts, said Doug Hecox, spokesman for Federal Highway Administration.
“To not be able to compete (for federal contracts) is really a harm to that business,” Hecox said. “Obviously, companies don’t want it to happen.”
The State Board of Registration for Professional Engineers and Surveyors is still investigating whether to revoke the professional engineering licenses for TesTech, CESO, David Oakes and Aziz, according John Greenhalge, the executive director.