City sued over snow removal bill

A Glen Burnie snow removal company filed a $5.9 million lawsuit against Baltimore City on Wednesday, seeking to be paid for its work during last year’s historic snowstorms.

The Delmarva Group Corp. had been trying unsuccessfully to get the money since last spring, when its bill was rejected as incomplete by the city’s Board of Estimates. Delmarva and 59 subcontractors worked more than 21,500 hours from Feb. 10 through Feb. 18 as the city was buried in almost 50 inches of snow, according to its lawsuit filed in Baltimore City Circuit Court.

“The city said, ‘Thank you very much but the joke’s on you,’” said Andrew D. Freeman, a lawyer for the company. “‘We get the benefit of the work and we’re not going to pay you.’”

Lawyers for the city said that last May, as the Board of Estimates was preparing to approve more than $20 million in snow removal payments, Delmarva owner Richard Benson submitted invoices and bills without all of the required information.

City Solicitor George A. Nilson said Wednesday afternoon that Delmarva still has not provided the requested information.

“He’s the only contractor who never submitted a purchase order,” Nilson said of Benson. “If they could produce the invoices, we would pay.”

Freeman countered none of Delmarva’s subcontractors had purchase orders at the time of their work and created them afterward.

“What’s puzzling is, the city says, ‘Delmarva didn’t adequately document its time and its subcontractors’ time,’” said Freeman, of Brown, Goldstein & Levy LLP in Baltimore. “On the other hand, it paid the subcontractors.”

Nilson said Delmarva subcontractors contacted about their bills provided adequate documentation and were cleared for payment.

The company’s lawsuit alleges it faxed the city a price quote that a fire marshal said, after consulting with a Department of Finance official, would serve as a contract. The quoted offer was $350 per piece of equipment per hour.

Freeman said the solicited and accepted bid was all that was required for a contract under the emergency procurement policy in effect at the time.

Nilson disputed Delmarva’s claims, saying its dealings with the fire marshal “have not been substantiated” and noted the quoted price was very high. Lawyers in his office said last May that the average charge per hour for large hauling equipment was $198.

“We were disinclined to believe [the claim] for very good reasons,” Nilson said Wednesday.

Freeman acknowledged the hourly rate was high but said the city was a victim of the laws of supply and demand.

“The city through its own lack of foresight failed to line up equipment,” he said.

Delmarva owner Benson was heading to another snow removal job before dawn on Feb. 10, 2010, when he heard a radio commercial by the city seeking help with snow removal, the lawsuit states. Delmarva employees arrived at the Pimlico Race Course parking lot by 11 a.m. as requested after Benson was told his quote was acceptable, the lawsuit states.

“Over the next 48 hours, City officials repeatedly asked Delmarva to bring in more equipment pursuant to their existing agreement,” the lawsuit states.

By Feb. 13, Delmarva was overseeing subcontractors and sub-subcontractors with nearly 200 pieces of equipment, the lawsuit states.

“Delmarva and its subcontractors worked around the clock and did their job well,” the lawsuit states. “They were praised by City officials throughout the crisis.”

Delmarva’s final bill totaled $7.5 million, Freeman said. The $5.9 million sought in the lawsuit represents Delmarva’s fees minus what the company would have paid its subcontractors, he said.

Freeman provided a Feb. 17, 2010, e-mail from the chief of fiscal services at the Department of Transportation quoting Delmarva’s bill as $7 million at the time.

“Our Inspectors agree with [Benson’s] equipment and rate and he is one of the top five vendors who are working here and they need him to continue to work,” Parvathy Murali wrote.

The city’s refusal to pay forced Delmarva out of business, Freeman said. The company has not performed any plowing work this winter.

“It can’t survive without this debt being paid,” he said.