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Analysis by Mike Hudson

The non-union Orchard Park contractor that won a $775,000 contract from the New York Power Authority for asbestos abatement at the Niagara Power Project seriously underbid the work and may become the target of an investigation by the U.S. Department of Labor for violation of the laws concerning prevailing wages, the Reporter has learned.

Numerous calls by both this newspaper and local union officials to NYPA Chairman Michael Townsend and CEO Richie Kessel to apprise them of the situation and seek comment went unreturned last week.

Epic Contractors of Orchard Park beat out 47 other firms to win the contract, which was awarded by the NYPA in October. Epic submitted the lowest bid of any contractor qualified to do the work.

According to NYPA's website, the contract would provide for long-term asbestos abatement services for the Niagara Power Project buildings that have been found to contain a significant amount of asbestos piping and ductwork insulation, which has deteriorated over time, representing a liability, and the project would abate remaining asbestos to eliminate the potential for further damage and to eliminate restrictive conditions associated with working on and around asbestos-containing material.

In addition, several areas to be abated are coated with paint containing high levels of heavy metals and PCBs, which need to be removed and disposed of at an approved site. Contract services were to have included all labor, supervision, materials and equipment, insurance, permits, all other forms of governmental approval, and any other services necessary to perform all operations required for the abatement and remediation of areas known to contain asbestos-containing materials, as well as reinsulation and painting.

Dick Palladino, business manager for Laborers Local 91 here, said he was approached by John McCune, a project manager for Epic, who said he would like to hire one Laborer out of the union hall to assist two of his employees on the work. Palladino told McCune that would be fine, but reminded him that, because it was a government contract, the prevailing wage and benefits package would be in effect for all workers, union or not.

Palladino then went on to explain that current union contracts contain what are known as "weighted benefits," meaning that in addition to workers receiving time and a half for overtime and double time on Sundays in their paychecks, the benefits package goes up by the same amount.

"It was obvious that he hadn't known that, he didn't have a clue," said Bill Grace, Local 91's representative on the Laborers District Council, who sat in on the meeting with Palladino and McCune. "He said, 'What do you mean?'"

Palladino said that, once he'd made it clear to McCune, Epic was no longer interested in using any union workers.

"Clearly, they made a mistake in their bid amount," Palladino said. "I told them that we'd have no other legal recourse than picketing the job site."

But there was a problem. Both the executive offices of the Power Project and Niagara University use the same driveway.

"We've always had a super relationship with the university, it was Christmas, and besides that, the school was hosting the World Junior Hockey Championship, with people coming in from all over the world."

Palladino made the call not to picket the job site.

"I just couldn't bring myself to do it," he said.

What he can and will do is to pull Epic's payroll records in order to prove that the prevailing wage as stipulated in the Laborers contract isn't being paid to the non-union employees performing the work for NYPA.

Violation of the prevailing wage statutes is considered a serious offense, and one that carries substantial penalties. The contractor's contract may be suspended or canceled, back wages must be paid, and suspension of future government contracts for a period of up to three years may be imposed. For a company like Epic, such sanctions would be disastrous.

Falsification of payroll records, or demanding kickbacks from workers, is subject to criminal prosecution that can result in significant fines and even imprisonment.

"We're going to pursue every legal option we have on this," Palladino said.

Niagara Falls Reporter www.niagarafallsreporter.com Jan. 11, 2011