DISADVANTAGED BUSINESSES LEFT HELPLESS
     AFTER NORTH CAROLINA DEPARTMENT OF TRANSPORTATION
     FEDERAL AVIATION AND SM...
Disadvantaged Businesses Appeal to Public Officials
Page 2

many of the disadvantaged businesses find themselves in the mi...
Disadvantaged Businesses Appeal to Public Officials
Page 3

destroyed. Federal, state and local dollars subsidized all of ...
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Disadvantaged Business Left Helpless After North Carolina Department Of Transportation, Federal Aviation And Smith-Reynolds Airport Debacle

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Disadvantaged Business Left Helpless After North Carolina Department Of Transportation, Federal Aviation And Smith-Reynolds Airport Debacle

  1. 1. DISADVANTAGED BUSINESSES LEFT HELPLESS AFTER NORTH CAROLINA DEPARTMENT OF TRANSPORTATION FEDERAL AVIATION AND SMITH-REYNOLDS AIRPORT DEBACLE Many disadvantaged and small businesses were left helpless after the North Carolina Department of Transportation, Federal Aviation and Smith-Reynolds Airport failed to enforce federal regulations affecting “disadvantaged business enterprises” (DBEs) on the Smith-Reynolds Runway 33 Airport Improvement Project. The state of North Carolina received several million dollars from the Federal Aviation Administration to implement safety improvement projects for small airports. However, according to “disadvantaged business enterprises” it appears the Smith-Reynolds Runway Improvement Project may have resulted in a calamity of errors and the demise of several small and disadvantaged business enterprises. The prime contractor on the project, Mainline Contracting, has filed bankruptcy and left a number of disadvantaged businesses attempting to find help in recovering monies owed for work performed and accepted by Smith-Reynolds Airport and the North Carolina Department of Transportation. Problems with payment emerged shortly after Mainline was awarded the contract in October, 2008. Subcontractors began contacting the North Carolina Department of Transportation and the Federal Aviation Administration because payments for work performed had not been made to subcontractors. Although the North Carolina Department of Transportation and Smith-Reynolds Airport had issued payments to Mainline Contracting – payments had not been made to several subcontractors on the project. North Carolina Department of Transportation and state policies require prime contractors to pay subcontractors within seven days of receiving payments from the owner. In this case, disadvantaged businesses found that Mainline Contracting had received payments from Smith-Reynolds Airport months in advance of payment to subcontractors. While state and federal laws affecting “prompt payment” had been overlooked by state, federal and local officials, disadvantaged businesses were being forced out of business and experiencing foreclosures resulting from lack of action by public officials. Several thousand pages of documents reviewed by the North Carolina Department of Transportation’s Office of Inspector General reveal repeated manipulation and revision of figures and payments, adjusting quantity and quality of materials - materials sometimes classified as “unsuitable” for scopes of work performed under the contractual agreement between Smith-Reynolds Airport and Mainline Contracting. Several disadvantaged businesses (DBE firms) requested investigations, citing irregularities, breach of contractual agreements, violations of federal and state laws and possible safety concerns related to the use of unsuitable materials in the construction of the embankment constructed on the project. Unfortunately, neither the North Carolina Department of Transportation, the North Carolina Attorney General, Smith-Reynolds Airport nor Federal Aviation has adequately addressed violations and evidence presented. Now,
  2. 2. Disadvantaged Businesses Appeal to Public Officials Page 2 many of the disadvantaged businesses find themselves in the middle of bankruptcy proceedings stemming from Mainline Contracting’s recent Chapter 7 Bankruptcy filing. Disadvantaged and small businesses are attempting to find money to retain attorneys to assist as we fight to get our claims addressed in bankruptcy court and battle with the bonding company. “We have been victimized terribly on this project. Firstly, we jeopardized our families and credit when the North Carolina Department of Transportation, Smith-Reynolds Airport and Federal Aviation failed to enforce their policies regarding ‘prompt payment of disadvantaged businesses and subcontractors’. Secondly, we were forced to transport significant quantities of crushed stone and materials in an effort to get the soil to meet compaction requirements and we were unable to secure payment for much of the materials we transported although Smith-Reynolds Airport was aware that unsuitable materials were used. We had small businesses laden with fuel bills, labor costs, maintenance and other business expenses but we were unable to secure payment for work performed. Many small businesses folded under the gravity of the expenses and an inability to cash flow without payment for work accepted.” “Businesses identified as disadvantaged and small have lost all of their property. Some have lost homes and everything they owned and we now read in newspapers that Mainline Contracting loaned monies to sister companies while failing to pay subcontractors. The pain is further exacerbated as we learn that Mainline has another company that purchased over ninety percent of their assets during the bankruptcy auction. We cannot understand the endless pattern of injustice”. “We never would have thought that our state and federal governments would allow this level of abuse and injustice. This experience gives new meaning to the adage that ‘justice is green’. When you have money and influence it seems that laws do not apply. Small businesses and poor people do not have a chance of survival and fairness when public officials turn their heads and look the other way.” During the life of this project we have repeatedly notified local, state and federal officials about the numerous violations and everyone directed us to secure an attorney and battle in court. As small businesses, we do not pursue work just to keep attorneys in business. We cannot afford to pay attorneys to protect the rights that we supposedly have as Americans and disadvantaged businesses under federal guidelines. Legislators directed us to find attorneys, North Carolina Department of Transportation directed us to find attorneys. U.S. Congressional staff directed us to find attorneys. Federal Aviation directed us to find attorneys. Now the public is holding a project that is incomplete and possibly unsafe as a result of possible shifting of the embankment - stemming from use of what appears to have been unsuitable materials. Subcontractors are unpaid. Federal and state laws were violated. Small and disadvantaged businesses, families have lost their livelihood. Mainline Contracting continues business under a sister company. Federal, state and local workers charged with the responsibility of monitoring and compliance continue receiving their salaries and the small disadvantaged businesses are left with no help and livelihoods
  3. 3. Disadvantaged Businesses Appeal to Public Officials Page 3 destroyed. Federal, state and local dollars subsidized all of this injustice. Our tax dollars were used to perpetuate this ongoing pattern of abuse and. Something is badly wrong in our system. Our outcry today is to satisfy your debt federal government, state of North Carolina, Smith-Reynolds Airport and Forsythe County. We thought we lived in a country where justice had a chance of prevailing for all, the poor and disadvantaged included.

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