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August 24, 2009

DiNapoli: DOT Contract Rejected Due to
Unanswered Questions About Vendor

$7 Million Federal Stimulus Contract was for Bridge Painting
in Putnam, Orange and Dutchess

New York State Comptroller Thomas P. DiNapoli today rejected a Department of Transportation (DOT) contract that would have paid $7 million in federal stimulus funds to Bronx-based Steed General Contractors, Inc. for painting bridges in Putnam, Orange and Dutchess counties. After warning DOT twice and giving the agency repeated opportunities to address concerns about the vendor, DiNapoli sent a letter to DOT today rejecting the contract.

“Federal stimulus funds are not free money,” DiNapoli said. “These are taxpayer dollars. There is pressure to spend stimulus money quickly, but quickly does not mean recklessly. Every federal stimulus contract should ensure high quality and value for taxpayers. State agencies like DOT have to ensure that only responsible vendors get taxpayer-funded business. My office is continuing to track and audit stimulus spending. We’re going to protect taxpayers and we’re going to make sure that every stimulus dime counts.”

Steed is located at 1445 Commerce Avenue in the Bronx. The contract was for painting 61 bridges along I-84.

Following an extensive, but expedited review of materials supplied by DOT, as well as independent research by DiNapoli’s staff, several serious concerns about Steed and the lack of due diligence in the contracting process were identified. Among them:

  • Unresolved questions regarding the control or influence exerted over Steed General Contractors by debarred vendor Delphi Painting and Decorating and its owner, Steve Papastefanou Sr. Steed may be a front company created by Papastefanou, who along with his company Delphi Painting and Decorating, is debarred by the New York State Department of Labor for prevailing wage violations for the period October 2007 – October 2012.
  • Investigations into allegations raised by DiNapoli’s staff after the initial contract submission were not completed.

As a result of these findings, DiNapoli returned the Steed contract to DOT unapproved. State agencies and public authorities are required by law to determine that vendors selected for state construction contracts are the lowest responsible bidders. Contracts submitted to the Comptroller’s Office for approval must include an affirmative declaration that the vendor has been determined to be responsible, which the Comptroller’s Office reviews. State agency contracts valued above certain cost thresholds are submitted to the Comptroller’s Office for approval.

DiNapoli is posting information about the state’s use of federal stimulus funds on his Open Book New York Web site ( DiNapoli has also designated staff to conduct in-depth, expedited reviews of contracts involving federal stimulus money. His staff is examining all contracts looking for companies who may be pricing goods or services higher than what is reasonable to ensure federal funds are used efficiently. Stimulus funds are “use it or lose it” dollars ― the federal government requires that New York spend this money quickly or forfeit its share. DiNapoli’s staff has been approving stimulus-related contracts in an average of 3.5 days.

Click here for a copy of the rejection letter.



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