Allied Waste settles fine from Chicago for $ 11 million
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By Paul Merrion | Crain´s Chicago Business

Jan. 20 — One of Chicago´s largest trash haulers has paid an $ 11-million settlement after a city investigation found “substantial shortfalls” in meeting goals for subcontracting work to companies owned by women and minorities since 2002.

Allied Waste Transportation Inc., based in Melrose Park, was required to subcontract 16.9% of its contracts with the city to minority-owned firms and another 4.5% to women-owned companies. The city´s investigation found that those subcontractors delegated part of the work to firms that were not owned by women or minorities, and that Allied did not accurately keep track of minority participation.

The shortfall came to light when Allied´s parent company was acquired by Phoenix-based Republic Services Inc. in December 2008. After replacing Allied´s top management, Republic investigated allegations about the subcontracting shortfall, which it confirmed and reported to the city and the U.S. attorney´s office in Chicago.

“We are very pleased with Republic and Republic´s senior management for recognizing the seriousness of these issues, disclosing them to the proper authorities, including the city, and taking steps to prevent them from occurring again in the future,” city corporation counsel Steve Patton said in a statement. “The city is committed to open, honest and transparent contracting and continually stresses the importance of reporting suspected fraud or abuse to the city´s Office of the Inspector General.”

Allied, which has had nine contracts with the city since 2002 for trucking waste from transfer stations to landfills, also agreed to convert 79 temporary workers to full-time positions with higher pay and full benefits for at least three years; boost subcontracting work for minority- and women-owned companies to make up for past underfunding; and waive $ 40 million in contractual claims against the city for allegedly falling short of “minimum quantity requirements.”

Allied also will be allowed to bid on future city contracts as part of the settlement. Chicago plans to use the $ 11-million settlement to administer and promote participation by minority- and women-owned companies in city contracting.

Paul Merrion is a reporter for Crain´s Chicago Business, a sister publication of Waste & Recycling News.

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