[Baltimore Sun] Inspector general asks Baltimore City to pay contractor after delaying payments
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The Office of the Inspector General has asked Baltimore City to pay a contractor after delaying payments totaling over $1 million for work performed during at least 16 construction projects that occurred between 2017 and 2023.
“Many of the concerns in question extend back to previous administrations, which is exactly why Mayor Scott has prioritized addressing these type of longstanding issues in the city’s payment systems and is working to modernize city government,” the mayor’s office said in an emailed statement to The Baltimore Sun. “DOT has submitted an official response to the OIG report and is working to address the remaining issues.”
In May 2023, a contractor, who was not identified, submitted a complaint to the Office of the Inspector General that Baltimore City had withheld the final payment of construction projects mainly done on sidewalks and alleyways, which violates state law, according to the inspector general’s report Tuesday.
“The mission of the Office of the Inspector General (OIG) is to promote accountability, efficiency, and
integrity in City government, as well as to investigate complaints of fraud, financial waste, and abuse,” the inspector general’s office said in the report. “The complainant alleged the city’s delay in remitting these payments violated State of Maryland law.”
Final payments to a contractor can be withheld for a period to evaluate whether the project was done properly, but the payment must be released after 120 days of the job completion unless there is a dispute, according to state law.
Following an investigation, the office found that the city owed the contractor for 17 contracts totaling $1,030,481.52, according to the report.
The office reviewed payment records for 16 of the 17 contracts in the complaint letter because the 17th project was still an active contract at the time.
Payment records revealed that the city had not paid for the 16 completed projects and owes the contractor $1,008,102.23. Between July and December 2023, the city had paid $762,473.31 for eight of the contracts but waited at least 233 days since the final inspection date to make these payments, the report says.
After the investigation, the Department of Transportation found that the remaining eight contracts have a value of $236,340.45, which could be attributed to another finalized payment that the city must pay, DOT said in a letter to OIG. The department will be following up with the contractor and provide a timeline for the release of the remaining funds, the letter says.
“We have determined that 8 out of 16 have been closed with all retainages released,” the department said in the letter. “The remaining 8 contracts are in various stages of the close out process, including release of retainage. These have a retainage amount available for release valued at $236,340.45. We will follow up with the contractor and provide a timeline for the release of the remaining funds.”
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