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Maryland’s Forrester Construction made millions from the District government, but now it will have to part with some of it. Forrester will pay more than $2 million to settle a federal investigation into its contracting schemes, according to a new agreement with prosecutors.
Forrester’s plans, unearthed two years ago in a Washington City Paper story, relied on the District’s Certified Business Enterprise program. Meant to help small or disadvantaged businesses win city contracts, the CBE program gave companies like Forrester bidding preferences if they teamed up with District firms.
In exchange for the bidding help, the company with CBE status was supposed to handle at least half of the project. Forrester teamed up with a CBE called EEC of D.C. on three projects, including the construction of a new Department of Employment Services headquarters and the renovation of Anacostia High School. Forrester also made agreements on more projects with another CBE that isn’t named in the agreement with prosecutors, embedded below.
Soon after cutting the joint venture deal with the CBEs, though, Forrester revised their partnership agreements in secret letters that weren’t shared with the District government. Where the CBEs once had a 51 percent share in the joint ventures with Forrester, the new letters cut them out of most of the money to be gained from the projects, making them instead into fronts so Forrester could enjoy the CBE preferences.
The scheme came to light when EEC fell out with Forrester over their Anacostia High School agreement. Last year, Forrester agreed to pay the District $1 million and not seek CBE preferences for more than two years, while EEC has been banned from the program for five years.
As part of the agreement, Forrester may end up helping District small businesses after all. The new agreement with the feds requires, among other things, that Forrester offer workshops on how to run a construction company.
Photo by Darrow Montgomery