Pa. Turnpike claims software fraud, wants $45M
The scandal-plagued Pennsylvania Turnpike Commission is suing a Colorado contractor for more than $45 million, alleging the company orchestrated an overbilling scheme to implement a computer software system that doesn't work properly.
Lawyers for the turnpike filed the 37-page lawsuit against suburban Denver-based Ciber Inc. and former Ciber Vice President Dennis Miller in Dauphin County Common Pleas Court this month.
The lawsuit accuses Ciber of assigning “repetitive and useless assignments in an effort to make work” to increase billing amounts to the turnpike; billing for positions not authorized under contract agreements and for services not delivered; and overcharging for software implementation. Turnpike spokesman Carl DeFebo declined to answer questions related to the lawsuit, citing the pending litigation.
Ciber spokeswoman Bonnie Bird responded in a statement calling the lawsuit baseless.
“The Ciber contract with the Turnpike Commission was timely and properly performed. The system was accepted and approved by the client and has been in use for several years,” Bird said. “Ciber denies any liability to the Turnpike Commission and will vigorously defend itself against the commission's baseless claims.”
In March, the Tribune-Review obtained internal turnpike documents that showed the agency spent nearly $50 million more than necessary to buy computer software as part of a contract with Ciber. The problems were outlined in a report to the commission by Texas consultant Phoenix Business Inc.
The $58.3 million the turnpike paid to Ciber for the software system should have cost $10 million to $15 million, according to Phoenix.
Ciber figured prominently in a March 2013 grand jury presentment against eight former commission officials and contractors, including Miller, 53, of Harrisburg. Prosecutors and a judge allowed Miller in September to enter a program for first-time offenders — known as Accelerated Rehabilitative Disposition, or ARD — that will allow him to have the charges dropped if he successfully completes a two-year probationary period.
“It did not require him to admit guilt, and he continues to maintain his innocence,” said attorney Mark Sheppard, who represented Miller in the criminal case. “I think the resolution was a fair and appropriate result given the evidence in the case — one that will result in the dismissal and expungement of all the charges.”
Sheppard said he could not comment specifically on the civil case because he's not representing Miller in that matter. Miller could not be reached.
With Miller serving as its point man in Pennsylvania, Ciber secured $82 million in contracts with the commission from 2004 to 2008 — deals that turnpike officials approved.
The lawsuit details what the turnpike says are several failings, including overbilling at a rate of $196 an hour for software support work despite a proposed rate of $160 an hour; proposed funding of 20 consultant positions and then billing for 40 positions; and failing to live up to several implementation steps of the contract but still billing for them.
The lawsuit is the latest in the fallout related to a pay-to-play grand jury presentment that ensnared former CEO Joe Brimmeier, 66, of Ross and former board chairman Mitchell Rubin, 62, of Philadelphia. Brimmeier pleaded guilty in November to a felony conflict-of-interest charge and is serving five years of probation. Rubin pleaded guilty to a misdemeanor charge of commercial bribery in exchange for two years of probation. Each must pay a $2,500 fine.
Bobby Kerlik is a staff writer for Trib Total Media.