An attempt to take advantage of a U.S. Department of Transportation program designed to help socially disadvantaged small businesses has resulted in a $2.4 million settlement between a Plainville-based construction company and the federal government.

According to the U.S. Attorney’s Office in Connecticut, Manafort Brothers Inc. submitted a bid to the Connecticut Department of Transportation in 2007 to serve as general contractor on a project funded both federally and by the state that involved a two-mile relocation of Route 72 in Bristol and Plainville. The project also included a 2.4-mile reconstruction of existing secondary roads.

All qualifying bids were required to designate a percentage of work that would be performed by what’s called disadvantaged business enterprises, or DBEs. The goal is to provide socially and economically disadvantaged contractors who have faced historical barriers in the construction industry with a fair opportunity to compete for federally funded work.

In April 2007, the DOT determined that Manafort was the low bidder on the project at $39.66 million. Manafort represented to the DOT that a company whose name was not revealed by authorities, and referred to only as “Company #1″ in court documents, would perform more than $3 million worth of work as a DBE.

As part of its bid, Manafort said the DBE company would be responsible for the project’s reinforcing steel, materials for structural steel, furnishing a pedestrian bridge and the majority of work for a large retaining wall adjacent to the new highway.

During the course of the work, state officials determined that the DBE company was not performing most of the work that Manafort claimed it would. In fact, an investigation revealed that Manafort was using the DBE as a “pass-through entity,” according to authorities. In other words, Manafort was negotiating with other subcontractors to do the work that the DBE company was supposed to perform.

Federal authorities claim that Manafort arranged to pay those contractors through the DBE to skirt the federal regulations.

“Manafort Brothers Inc. sought to circumvent, misrepresent and outright deceive the U.S. government,” New Haven FBI Special Agent in Charge Patricia Ferrick said in a statement. “Contractors that work on government-funded projects, such as those with disadvantaged business enterprise requirements, need to operate above-board or be excluded from the bidding process. Manafort has agreed to undertake remedial compliance measures and that is a step in the right direction.”

Manafort entered into a civil settlement agreement and nonprosecution agreement with the federal government. As part of the settlement, the company will pay $2,460,722. The agreement addresses only the corporate criminal liability of Manafort and not any potential criminal charges against individuals.

Also as part of the agreement, Manafort will undertake remedial measures to ensure compliance with the DBE program for current and future federally funded construction projects. For instance, Manafort will establish a position for an ethics and compliance officer; form a compliance committee that meets regularly to address DBE-related issues; mandate DBE compliance training for its employees; continue assisting law enforcement agencies with their investigation; and remove company personnel who were directly involved in the misconduct.

“By entering into this agreement, Manafort recognized that it made false statements to the government and [has] committed to change,” Connecticut’s acting U.S. Attorney Deirdre Daly said in a statement. “While our investigation of individuals continues, we agreed to this corporate resolution in order to reflect the company’s efforts to reform itself and to avoid further damage to its many blameless employees.”

In a statement sent to the Law Tribune, Manafort said the decision to enter into the settlement was in the best long-term interests of its nearly 800 employees, subcontractors and customers. “While [Manafort] respectfully disagrees with aspects of the government’s characterization of the company’s shortcomings in this matter, the company acknowledges that it needed to improve its DBE compliances,” said the statement.

The statement said the company is now ready to move beyond the incident and that, as a result of the remedial steps, the Federal Highway Administration deems the company “presently responsible.” The company has been in business for 95 years.

Manafort is represented in this matter by Thomas Murphy, of Cowdery, Ecker & Murphy in Hartford. •