District seeks $45 million from Heery/Mitchell, which says claims are groundless
The Atlanta Journal-Constitution
Published on: 03/24/08
The DeKalb County school system has significantly upped the ante against its former construction management company, filing an amended lawsuit that now seeks at least $45 million for alleged overbilling and mismanagement.
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According to documents filed last week in DeKalb County Superior Court, the school system has also charged that the abuse by the Heery/Mitchell management company was purposeful and systematic -- so it will request that a jury triple its award to account for alleged "racketeering."
"Heery/Mitchell has defrauded the school district for hundreds of thousands of dollars in multiple ways [and] utterly failed in its management duties, costing the school district tens of millions of dollars," said a statement released Monday through a schools spokesperson.
Heery/Mitchell oversaw nearly $1 billion in construction projects for the DeKalb schools system. DeKalb dropped the company in 2006 after construction costs and delays.
A report by independent auditors said the company did not live up to its contractual obligations, though it found no evidence of fraud or theft.
Martha Pacini, vice president of corporate communications for the national firm Heery International -- which joined with Atlanta-based E.R. Mitchell and Co. to form Heery/Mitchell -- called the DeKalb's charges "inflammatory."
Pacini said the school system's allegations are groundless, that the firm is proud of its work and has never billed for an hour not worked. She said DeKalb's lawyers have billed the county more than $3.5 million for their work on the schools' lawsuit and that the suit is "nothing more than a move to justify that expense."
The two sides have been going at it since this time last year, after Heery sued for $1.5 million in unpaid invoices and alleged damages and DeKalb counter-sued for at least $17 million over alleged overbilling and damages.
Part of the auditors' conclusions included probable overpayments for work. This part is key to the DeKalb system's allegations in its lawsuit.
Attorneys from powerhouse law firm King & Spalding, hired by DeKalb to pick through contracts and billing receipts, found what they said were numerous instances of fraud. Among other examples, they allege Heery:
• Misrepresented the progress of projects in order to charge more money.
• Altered bills submitted to the system to disguise that they had already been paid.
• Falsified timesheets and billed for employee hours not worked on DeKalb's projects.
The system also alleges that similar problems have been reported on projects run by Heery across the country, including in Dallas, Houston, Seattle and Lakeland, Fla.
Since booting Heery/Mitchell, DeKalb has moved oversight of its construction program in-house. Last year, county voters renewed a 1-cent-on-the-dollar sales tax for school construction that extended the program another five years.



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