Gary Airport Authority Fails to Comply with Davis-Bacon; Other Legal Requirements

by Ken Davidson

The Indiana State Board of Accounts has issued a comprehensive report indicating that the Gary Chicago Airport Authority (GCIA) failed to comply with the Davis-Bacon Act which requires prevailing wages be paid on public works projects. The stunning finding was just one of many findings by the Board. In so finding the Board stated:

Davis-Bacon Act

Airport Management relies upon paid consultants to ensure compliance with the Davis-Bacon Act
(payment of prevailing wages).

1. The contractors submitted payment applications to the Project Engineers. Before the Project
Engineers approved the payment, the Project Engineers must receive the certified weekly
payrolls from the Contractor. The Project Engineers stated that they ensured the wages paid
equal or exceed the applicable prevailing wage rates. However, no indication was made on
the copies of the certified payrolls or other forms of documentation maintained as evidence
that such reviews were conducted.

2. A system of controls to ensure all certified payrolls were received did not exist.

3. The management of the Airport Authority did not receive any correspondence from the paid
consultants to ensure compliance with the Davis-Bacon Act.

Additionally, the Board pointed out that the GCIA was required to repay nearly $10 million to the Regional Development Authority because it failed to properly account for the money. It appears that this finding may result in an additional $10 million in Federal and State grants requiring repayment. The Board found that the Authority billed invoices to the RDA, the US Department of Transportation and the Indiana Department of Transportation and received reimbursement from each. The system was supposed to provide a total of $9,917,559.93. Instead the GCIA received that amount from both Federal and RDA coffers.

The Board also found that the GCIA awarded change orders totalling over 20% of the bid price. The law states that change orders cannot exceed 20% of the total bid price.

The report goes on and on, reporting a litany of violations. This report covers the time period before the current board took over. You will recall that the Gazette has reported that Nathaniel Williams was President of the GCIA Board at this time. Nathaniel Williams was also in charge of maintaining the records at the Gary Housing Authority when they lost hundreds of properties to tax sale, failed to make repairs with grants that had been awarded and failed to utilize insurance proceeds to repair burned out properties. Mayor Karen Freeman-Wilson appointed Williams to the Airport position after many of the issues at GHA were discovered.