By Mike Dunn

PHILADELPHIA (CBS) — Philadelphia’s inspector-general says a company hired by the Philadelphia Gas Works to pave the streets after gas line repairs was caught overbilling the city, and has now agreed to pay back more than $2¼ million.

The Plymouth Meeting-based construction firm Danella has been paving roads torn up by PGW since 2010.   But inspector-general Amy Kurland says an investigation prompted by complaints to PGW found that the company overbilled for construction materials.

“They used less concrete and asphalt than they were supposed to under the contract terms, and at the same time, they billed PGW for the full amount that they were supposed to use,” Kurland says.  “So there was an overbilling of about 1.75 million dollars.”

Kurland says the firm will repay that amount and will pay an additional penalty of more than a half-million dollars.  She says the company will be allowed to keep doing work for the city, in part because Danella has stepped up its compliance training efforts.

“They have agreed to this comprehensive corporate compliance program, to prevent any problems going forward,” she says.  “They’ve made up for their past mistakes, so we’re very pleased with how the issue was resolved.”

The firm, according the IG, also agreed to guarantee the workmanship of its earlier paving.

“There is no evidence that the streets pose any danger, and no problems emerged as a result of the work.  But just to protect against any issues in the future, like accelerated wear and tear, we have asked for and they have agreed to indemnify the city and PGW for three more years.”

John Bass, vice president for construction at Danella, told KYW Newsradio that the firm denies any wrongdoing and has cooperated fully in the investigation.

Kurland says her office is looking at other firms that have done paving work for PGW or the city.

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