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Whistle-blower: Engineering firm bilked feds on Everglades restoration

An Orlando federal judge unsealed a lawsuit Tuesday against one of the nation's biggest engineering firms, Post, Buckley, Schuh & Jernigan Inc., that alleges it cheated the Army Corps of Engineers out of roughly $15 million on an Everglades restoration project.

Kermit Prime Jr. of Isleworth was a senior vice president at the firm and helped negotiate the $90 million, 15-year contract, according to his suit.

But he later discovered the company was cheating the corps, his suit alleges, by telling the government that PBS&J paid its employees more than twice what it really did.

When it negotiated the contract in 2001, the firm included projected labor costs based on its then-workforce, according to the suit. But once work began, the firm hired lower-cost employees and did not update the corps or contract, the suit alleges.

That happened even though the contract banned the company from making any profits on those labor costs, the suit alleges.

Between 2001 and 2007, the firm booked a 23 percent profit on the contract, the suit says: $8.9 million in net income on billings of $38.6 million. But at the time, its executives were telling corps officials in Jacksonville that the profit margin was no more than 10 percent, the suit alleges.

The suit also accuses the firm of wrongfully firing Prime in 2009 because he complained twice to his boss, Robert Paulson, about the labor charges.

Prime is the former president of the Florida Engineering Society. He joined PBS&J in 1997 as director of its Central/North Florida environmental division and was promoted to national senior vice president for environmental engineering.

PBS&J was acquired by WS Atkins plc, a British company, last year. Carol Hobbs, a spokeswoman at its Winter Park office, said her company had not seen the suit and knew nothing about its allegations.

The suit was filed Dec. 29, 2010, but remained a secret until Tuesday, when U.S. District Judge Mary Scriven ordered it unsealed. The federal government, she wrote, had declined to pursue a case against PBS&J.

Federal law allows whistle-blowers to sue on behalf of the U.S. government in fraud cases and keep a portion for themselves. Prime is asking for one-fourth of the money generated by the suit.

Prime's attorney, David S. Oliver of Orlando, estimated the labor overcharges at $15 million to $20 million.

The corps' Everglades project is one of the world's largest eco-system restoration jobs, encompassing 18,000 square miles. It's projected to cost $7.8 billion and take 30 years to complete. When the corps sought private engineering help, PBS&J formed a partnership with Parsons Corp. and was hired. Parsons Corp. is also a defendant in the suit.

Whistle-blower: Engineering firm bilked feds on Everglades restoration 12/14/11 [Last modified: Wednesday, December 14, 2011 8:34pm]
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