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Commercially Useful Purpose

By Alison Jimenez

Here is a report by the Indiana Department of Transportation highlighting problems with prime contractors claiming dollars towards their MBE goals that did not have a "commercially useful purpose."  "During the past several months, INDOT has discovered problems concerning the reporting of DBE utilization. The most common problem centers around subcontracts that require the DBE subcontractor to furnish and install materials. The materials we are concerned with are reinforcing steel, concrete structural members and structural steel. The prime contractors in these instances have purchased the material, given a small markup to the DBE subcontractor, and then claimed the material cost toward their DBE goal. This practice is not allowed. In order for the prime contractor to include the installed material in the DBE goal, the DBE Subcontractor must have performed a ?commercially useful function...continue to full post

Full post as published by Tanjeble on July 23, 2008 (boomark / email).