Miami County left out of roofing company’s payback for over-billing

March 01, 2017
The Miami County Sheriff’s Office in 2012 questioned the amount paid to Tremco to replace the roof on the Miami County Job and Family Services Building, shown here. Staff Photo by Amanda Seitz

An Ohio-based roofing company that the I-Team reported in 2014 was likely over-billing governments across the state quietly reimbursed some, but not all, of the agencies it was suspected of over-billing.

Tremco, based in Beachwood, voluntarily repaid 11 state agencies a total of $214,308 last year after it was discovered the company was not giving taxpayers the same discounts they were giving private companies.

“The money was paid in 2016 following discussions with the vendor after the action with the federal government,” said Ohio Department of Administrative Services spokesman Marty Berkowitz. “Ohio was not included in any formal settlement agreement. Tremco voluntarily paid the amounts as listed.”

The I-Team reported in 2014 that state and local governments had paid Tremco $23.4 million under those state contracts from 2006 to 2014.

Contacted this year, state officials said they don’t know which local governments were reimbursed. Tremco officials were asked the same question and responded with a statement that did not name which governments they reimbursed.

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Miami County officials, contacted this month by the I-Team, said they didn’t get any reimbursement from Tremco, though a local law enforcement investigation in 2012 called into question the company’s pricing and said county taxpayers overpaid hundreds of thousands of dollars.

In 2013, a federal lawsuit came to light, in which a former Tremco vice president alleged the company used misleading business practices in federal contracts. This included installing defective roofs, giving larger discounts to private customers than government customers and re-labeling generic material as high-end at a marked-up price.

Ohio officials based their blanket contract with Tremco, used by state and local governments, on those federal contracts.

Tremco officials said in their statement that they notified DAS “when Tremco discovered errors in its administration of these contracts.”

“The company also subsequently followed through on a process with the DAS to account for and correct those errors through reimbursements to affected state agencies and local entities that utilized the (state contract),” said a statement from the company.

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Tremco settled the federal lawsuit for $61 million, with a large portion going to the whistleblower because the suit was filed under the False Claims Act. The False Claims Act is a law the federal government and several states have encouraging whistle-blowers in government contracting fraud by allowing damages three times the amount of damages and giving whistleblowers a share.

Ohio has no false claims act, though Ohio Attorney General Mike DeWine and Auditor Dave Yost have both called for them in the past.

A spokeswoman for DeWine’s office declined to comment on the Tremco issue because the Ohio Department of Administrative Services negotiated the reimbursements with Tremco.

“We get involved when our clients seek our assistance or representation, but in many cases, state agencies resolve matters on their own,” said AG’s office spokeswoman Kate Hanson in an email.

Tremco’s statement says their over-billing of entities in Ohio wasn’t intentional.

“The errors that led to some customers not receiving full discounts on purchases through the (state contract) was not due to a business practice, but rather to unintentional errors in the administration of Tremco’s federal … contracts, the terms of which also impacted purchases under the (state contract),” the statement says.

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