Knowledge Corner

TSIB along with various other Brokers, General Contractors, Trade Partners, etc. is gearing up for the annual Construction Inclusion Week (CIW). This virtual event will take place from October 16th through October 20th, 2023.

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The construction workforce shortage is a growing concern for the industry. With contractors competing against each other to fill vacant positions, how can you get the most value for your recruitment dollars and find well suited employees? On many projects with public funding hiring minority and female workers isn’t just a good idea, it ensures you remain in compliance with regulatory requirements.

Last year the 6 leading U.S. General Contractors teamed up to create a consortium to help advance diversity, equity, and inclusion in the construction industry. This year, Mortenson, Gilbane, DPR, Turner Construction, Clark Construction, and McCarthy do it again. The 2nd Annual Construction Inclusion Week (CIW) kicks off October 17^th and continues through October 21^st. The main goal continues to be to create awareness while celebrating diversity, equity, and inclusion throughout the construction industry in offices, craft and jobsite crews, and industry affiliates.

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On projects with diversity goals, regulations require that certified firms provide meaningful participation, in other words, they must provide a Commercially Useful Function on their projects. When Contractors execute agreements that include diversity goals, they are committing to utilizing certified firms in a manner consistent with the regulations.

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One of our recent posts, “What Does MWBE Fraud Look Like?” introduced the concept of common fraudulent “schemes” that can occur regarding goal requirements for certified XBE’s (Minority, Women, and Disadvantaged Businesses) on projects with diversity goals. Let’s examine these unlawful courses of action more closely, including highlighting the cost to companies for non-compliance. The first scheme we look at is pass through.

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Have you heard of a supply scheme? If we revisit one of our past posts, “What Does MWBE Fraud Look Like?”, it introduces supply schemes along with other common fraudulent “schemes” that might occur in relation to goal requirements for certified MWBE’s (Minority, Women, and Disadvantaged Businesses) on projects with diversity goals. This post will examine supply schemes in more detail.

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Fraudulent schemes have become increasingly commonplace in relation to goal requirements for certified MWBE’s (Minority, Women, and Disadvantaged Businesses) on projects with diversity goals. In previous blogs, we have discussed pass through and supply schemes. This week we will examine a scheme known as a “Front”.

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As a business owner bidding on projects with diversity requirements, there is more to concern yourself with than simply submitting a competitive bid. You need to be aware of the various Minority, Women, and Disadvantaged Businesses (MWDBE) goal requirement schemes, so you do not unwittingly get caught in something deceptive and illegal. We have been writing about these schemes recently, including pass- throughs and fronts. This post will examine what is known as a Trucking Scheme.

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Over the last few weeks, our posts have discussed different types of fraud schemes that might occur in relation to goal requirements for certified Minority, Women, and Disadvantaged Businesses (MWBE or MWDBE) on projects with diversity goals. We also cited cases associated with those schemes that resulted in fines, imprisonment, and/or monitorships. In each case, an investigation produced and analyzed the evidence that resulted in successful indictments and the resulting penalties.