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May 31, 2019 - 12:18pm

Locally owned Zoladz Construction blames lobbying by pro-union group for loss of $435K contract in Hamburg

posted by Howard B. Owens in zoladz construction, Darien, business.

One of the area's largest construction firms, owned by Darien Center resident John Zoladz, lost a $435,692 contract for a project in Hamburg this week, after being the low bidder, and is blaming what the company describes as a pro-union front group for the change of direction.

Meanwhile, an organization calling itself The New York Foundation for Fair Contracting sent out a press release celebrating the decision by unnamed Erie County leaders, who squashed the Zoladz contract under the state's "Lowest Responsible Bidder" law.

The law allows government agencies to reject low bids from contractors not deemed qualified. Generally, that means the company placing the lowest bid has the capability to fully and reliably perform the contract requirements.

NYFFC's press release suggests Zoladz is not qualified because of two work-related deaths in the past couple of years and was accused of falsely claiming it was a small business owned by a service-disabled veteran.

The NYFFC press release says that Zoladz paid a $3 million fine, which is not entirely accurate. The company was required to pay a portion of that fine and there as no finding of liability.

While NYFFC portrays itself as a "watchdog" group, Zoladz, which is a non-union shop, alleges that the trustees of the nonprofit have strong ties to International Union of Operating Engineers Local 17.

"The entities share the same address and likely share services," Zoladz said in its press release. "The trustees also appear to include at least one apparent operator of a company that directly competes with Zoladz.

"Finally, the 'Foundation' appears to be funded, at least in part, by union-employer contributions from collective-bargaining agreements. It is clear that, even without the 'Foundation’s' previous history with Zoladz as explained below, it is a motivated competitor of open-shop Zoladz."

It is true that Zoladz was fined by the OSHA over work-related deaths of employees. In August of 2016, Aaron L. Wellman died when a piece of construction equipment rolled off a trailer on Route 20 in Darien Center. The fine in that case was $8,000. On April 5, 2018, an employee was caught in a conveyor belt and suffocated. Zoladz was fined $43,000.

"To the NYFFC’s understanding, this is the first instance of Erie County using its lawful responsible bidder authority," the NYFFC said in its statement. "This enforcement ensures responsible contractors who abide by the law and deliver a high-quality product have a fair shot at public works contracts."

In the Hamburg project, Zoladz bid on just a portion of the $3 million job. The company blames competitors for lobbying against the company receiving the contract.

From the press release:

"Zoladz Construction disagrees strongly with the county’s sudden reversal, coming as it does in the wake of governmental pressure from competitors," said Jennifer K. Harvey, attorney for Zoladz.

"While we certainly agree with DPW that the settlement at issue in this matter does not result in a negative finding, we vigorously dispute the legal and factual reasons DPW cited as a basis for finding Zoladz’ bid incomplete and subject to rejection.

"We are requesting a hearing to exhaust our administrative remedies, and we remain confident and hopeful that Zoladz will be able to start work soon on this long-promised project that’s so critical to the safety and peace of mind of county taxpayers driving in Hamburg."

The press release states the NYFFC issued a letter May objecting to the award of the contract and said the group has mounted a similar "attack" in Niagara County but that the County Legislature there investigated and found the complaints without merit before awarding the company a $1.8 million contract for work on the county landfill.

Zoladz, based in Alden, employes 175 people and was founded by cousins John Zoladz and Tom Dougherty in 1985, when they had only a tractor and a backhoe. Now they have offices in Charlotte, N.C., Avon, and Lackawanna.

Daniel Norstrand
Daniel Norstrand's picture
Last seen: 1 year 1 month ago
Joined: Jul 18 2016 - 10:27am

With half of the county's workforce employed by the government and the vast majority of them members of unions, I don't see where sympathy will be forthcoming. The charges leveled and fines imposed are pretty serious and the portrayal of the disposition of both is ambiguous at best, and seemingly deceptive. "No finding of liability" is laughable. The scheming scoundrels were busted and paid a serious chunk of change in what amounts to a "plea deal." Utilizing a disabled veteran as a figurehead for their bunko corporation is very ugly stuff.
The author goes out of his way to fawningly describe the humble beginnings of the untoward players while skipping any humanity for the deceased victims whose deaths brought fines for wrongdoing on the part of those untoward players. How about a little "fair and balanced?"

Frank Bartholomew
Frank Bartholomew's picture
Last seen: 1 week 6 days ago
Joined: Apr 4 2010 - 8:02pm

Being fined by OSHA after an audit/investigation does not equate to fault on the employer. The violations they were cited for may of had nothing to do with the actual accident, or it's cause(s). I have walked through an OSHA audit as a union steward, they will find something to fine you for. This said audit generated over $250k in fines. The company I worked for brought all the violations into compliance, drastically reducing the fines through abatement. I was a member of the company safety committee, and like management, thought we had an excellent safety program. This audit had us dumbfounded. We came to the conclusion the govt. was looking to make some quick cash. This was 25 years ago.

Daniel Norstrand
Daniel Norstrand's picture
Last seen: 1 year 1 month ago
Joined: Jul 18 2016 - 10:27am

"The company I worked for brought all the violations into compliance, drastically reducing the fines through abatement." Shows a lack of compliance Frank. I can't have any knowledge of your experiences but that quote says a lot. I would deduce that the company in question took advantage of the same avenues to reduce their fines and still paid LARGE. The exact amount for the... (fraud?) perpetrated is not disclosed but the whistleblower who busted them was reportedly paid nearly half a million dollars. According to my research, 'successful whistleblowers generally receive between 15 to 30 percent of the amount recovered by the government.' OUCH. The fact that the paid amounts regarding the deaths increased substantially leads me to believe that the fined entity isn't "getting it." Which may be playing into the state's decline of their bid. We (the state) could be substantially liable if those we have entrusted with the authority to accept bids, weren't diligent in their consideration of the company's history should some disaster occur in the course of the contracted work.
I'm no big fan of government's ability to do the right thing without the public keeping an eye of circumspect on the activities they perform. The company in question has given the government plenty of fodder to chew. If the company feels they've been wronged they could sue the state but unless there is some unseen conspiracy to rig bids, I don't see them gaining any traction.

Frank Bartholomew
Frank Bartholomew's picture
Last seen: 1 week 6 days ago
Joined: Apr 4 2010 - 8:02pm

Dan, the only way to reduce the fines was to be in compliance with the violations cited. not smoke and mirrors. This was a random audit which had nothing to do with the companies safety record. Apparently you missed my point. There are some ruthless employers out there, I would never attempt to deny that.

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