Thursday, March 30, 2017

Tremco, the "Darlings" of Purchasing Cooperatives. .

Any school administrator should know this before it's too late. The schools, and other public works that Tremco defrauded got NOTHING!

https://www.sec.gov/litigation/litreleases/2016/lr23639.htm  


U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 23639 / September 9, 2016

Securities and Exchange Commission v. RPM International Inc., et al., Case No. 16-cv-01803 (D.D.C. filed Sept. 9, 2016)

SEC Charges RPM International Inc. and its General Counsel for Disclosure and Accounting Failures

The Securities and Exchange Commission today charged Ohio-based chemical company RPM International Inc. and its General Counsel, Edward W. Moore, with failing to disclose a material loss contingency, or record an accrual for, a government investigation when required to do so under governing accounting principles and securities laws.

The SEC alleges that, from 2011 through 2013, RPM and one of its subsidiaries were under investigation by the U.S. Department of Justice (DOJ) for overcharging the government on certain contracts. 

Moore, RPM's General Counsel and Chief Compliance Officer, oversaw RPM's response to the DOJ investigation. According to the SEC's complaint, however, Moore did not inform RPM's CEO, CFO, Audit Committee, and independent auditors, of material facts about the investigation. 

For example, Moore knew but failed to inform them that: RPM sent DOJ estimates showing RPM's subsidiary overcharged the government on the contracts under investigation by a material amount; RPM agreed to submit a settlement offer by a specific date to resolve the DOJ investigation; and, prior to submitting the settlement offer to DOJ, RPM's overcharge estimates increased substantially to at least $28 million.

NOTE:  The DOJ already fined Tremco $61,000,000.00 for overbilling.  Again, the ones who were defrauded (primarily schools) got NOTHING.  

As a result of Moore's conduct, the SEC alleges that RPM filed multiple false and misleading documents with the SEC. For example, among other things, RPM failed to disclose in its filings with the SEC any loss contingency related to the DOJ investigation, or to record an accrual on its books, when required to do so by governing accounting principles and the securities laws. RPM also failed to disclose in its SEC filings a material weakness in its internal control over financial reporting and its disclosure controls when in fact such weakness existed. 

Consequently, RPM did not provide investors with accurate information about RPM's financial condition. In August 2014, RPM restated its financial results for three quarters that occurred during the DOJ investigation and filed amended SEC filings for those quarters, disclosing the DOJ investigation and related accruals. 

In the restated filings, RPM also disclosed errors relating to the timing of its disclosure and accrual for the DOJ investigation.

The SEC's complaint charges RPM with violating antifraud provisions of the federal securities laws, Sections 17(a)(2) and (a)(3) of the Securities Act of 1933; the reporting provisions of the federal securities laws, Section 13(a) of the Securities Exchange Act of 1934 and Rules 12b-20, 13a-1, 13a-11, and 13a-13 thereunder; and the books and records and internal controls provisions of the federal securities laws, Sections 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act. The complaint also charges Moore with violating Sections 17(a)(2) and (a)(3) of the Securities Act and Rules 13b2-1 and 13b2-2 under the Exchange Act. The complaint seeks permanent injunctions, disgorgement of ill-gotten gains plus interest, and penalties.
The SEC's investigation was conducted by Timothy K. Halloran and Michael J. Hoess. The SEC's litigation will be conducted by H. Michael Semler, Gregory R. Bockin, Mr. Halloran, and Mr. Hoess.
 SEC Complaint

http://www.sec.gov/litigation/litreleases/2016/lr23639.htm

Thursday, March 9, 2017

Another Angry Jurisdiction after Tremco's latest Overbilling Scam..

Friends:

Before the story, let me share basics to avoid such heartbreak.  If you can avoid three things, will have a much better chance of success with your project.

1.)  NEVER BUY A ROOF FROM A PURCHASING COOPERATIVE.  Purchasing Cooperatives are not competitiv in any way.

2.)  Buy Mainstream manufacturers like GAF, Firestone, Johns Manville, Carlisle.  They are also locally stocked by roofing material supply houses.  The supply house can also recommend quality roofing contractors.  The Supplier knows who pays their bills, and who doesn't.

3.)  Research before you buy.   Type "School Roofing Scam" into your browser, and do the same thing on YouTube.  You will find three players:  Purchasing Cooperative, Tremco, Garland.

It's your career, and your responsibility, so I hope this helps.

Now to the story (I have other examples like this):  

 http://www.mydaytondailynews.com/news/miami-county-left-out-roofing-company-payback-for-over-billing/wBxo5luYtlWL84jVwIySaN/

 Miami County left out of roofing company’s payback for over-billing


   

Posted: 10:23 a.m. Wednesday, March 01, 2017


"An Ohio-based roofing company that the I-Team reported in 2014 was likely over-billing governments across the state quietly reimbursed some, but not all, of the agencies it was suspected of over-billing.
Tremco, based in Beachwood, voluntarily repaid 11 state agencies a total of $214,308 last year after it was discovered the company was not giving taxpayers the same discounts they were giving private companies.
“The money was paid in 2016 following discussions with the vendor after the action with the federal government,” said Ohio Department of Administrative Services spokesman Marty Berkowitz. “Ohio was not included in any formal settlement agreement. Tremco voluntarily paid the amounts as listed.”
The I-Team reported in 2014 that state and local governments had paid Tremco $23.4 million under those state contracts from 2006 to 2014.
Contacted this year, state officials said they don’t know which local governments were reimbursed. Tremco officials were asked the same question and responded with a statement that did not name which governments they reimbursed.
Miami County officials, contacted this month by the I-Team, said they didn’t get any reimbursement from Tremco, though a local law enforcement investigation in 2012 called into question the company’s pricing and said county taxpayers overpaid hundreds of thousands of dollars.
In 2013, a federal lawsuit came to light, in which a former Tremco vice president alleged the company used misleading business practices in federal contracts. This included installing defective roofs, giving larger discounts to private customers than government customers and re-labeling generic material as high-end at a marked-up price.
Ohio officials based their blanket contract with Tremco, used by state and local governments, on those federal contracts.
Tremco officials said in their statement that they notified DAS “when Tremco discovered errors in its administration of these contracts.”
“The company also subsequently followed through on a process with the DAS to account for and correct those errors through reimbursements to affected state agencies and local entities that utilized the (state contract),” said a statement from the company.
Tremco settled the federal lawsuit for $61 million, with a large portion going to the whistleblower because the suit was filed under the False Claims Act. The False Claims Act is a law the federal government and several states have encouraging whistle-blowers in government contracting fraud by allowing damages three times the amount of damages and giving whistleblowers a share.
Ohio has no false claims act, though Ohio Attorney General Mike DeWine and Auditor Dave Yost have both called for them in the past.
A spokeswoman for DeWine’s office declined to comment on the Tremco issue because the Ohio Department of Administrative Services negotiated the reimbursements with Tremco.
“We get involved when our clients seek our assistance or representation, but in many cases, state agencies resolve matters on their own,” said AG’s office spokeswoman Kate Hanson in an email.
Tremco’s statement says their over-billing of entities in Ohio wasn’t intentional.
“The errors that led to some customers not receiving full discounts on purchases through the (state contract) was not due to a business practice, but rather to unintentional errors in the administration of Tremco’s federal … contracts, the terms of which also impacted purchases under the (state contract),” the statement says. "

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Avoid the grief, exposure, and pain by just saying "NO" to Purchasing Cooperatives, Tremco, and Garland.  You will be happier for it.  

Thank you for spending time with me here.  I know it gets boring, but I want to help you before the sharks circle with their "Predatory Sales Models".

I have over 105,000 views here, and I am thrilled that anyone cares.  

NOTE:  Retired 2003, do not solicit nor accept compensation or personal advancement of any kind.
Reject negativity in all forms, and always remember to keep looking "UP".

Respect.

Robert R. "Ron" Solomon
Director, Roof Consultant's Alliance
Public Procurement Analyst
State Certification CCC 1325620


Tuesday, February 7, 2017

Submit Voluntary Alternate when facing a "Proprietary Roofing Specification".

Submit Voluntary Alternate!
  
Do this IMMEDIATELY, and get your manufacturer approved.  The Manufacturer should help you.
The following suggestions are from a legal firm

Cohen Seglias 
Pallas, Greenhall, and Furman, PC
http://www.cohenseglias.com/federal-contracting-database/proprietary-specifications
"A proprietary specification is one which requires the use of a sole source product. Bidders are responsible for determining the cost and sources of the items specified. It is a contractor's obligation to raise questions to the Government concerning purported proprietary items prior to bid opening. The time for objecting to a proprietary specification is before the submission of bids, not afterward. T.H. Taylor, Inc., ASBCA No. 26494, 82-2 BCA p 15,877 at 78,753 and cases cited; see also ... Buchner & Moore, Inc., ASBCA No. 25186, 83-1 BCA p 16,332 at 81,186-87.
In order to recover under a theory of proprietary specifications, a contractor must prove that (1) the specifications described the characteristics of only one standard product, (2) it submitted data describing an equal substitute product, and (3) the substitute was of the same standard of quality. Urban Plumbing and Heating Co. v. United States, 187 Ct.Cl. 15, 408 F.2d 382 (1969)Gall Landau Young Construction Co., ASBCA No. 24859, 83-1 BCA p 16."
-------------------------------------------------------------

I am thankful for their effort.

This is what happens when you object, and offer a mainstream manufacturer:

"Brother Ron,
The bid was just awarded for the roofing at the middle school.
Together we saved the taxpayer over 410 k!! Once Garland/ Tremco were exposed,with your great effort,the project award was 719k ,as opposed to 1.29 mil. Just wanted to give you an update. Be well Brother Ron.
All the best"
 


Friends, I'm teaching  you how to fight back, and not turn down "Proprietary Specification" (public) work.  Submit your manufacturer through "Voluntary Alternate", and save both taxpayers (you), and your schools a ton of money in the process.  

I am very thankful, and respectful of the time you spend with me here. I consider it a privilege to serve you. 

I do not subscribe to the stereotypical roofer image, and believe roofing is a noble trade.

Reject negativity in all forms, and always remember to keep looking "UP"

NOTE: Retired 2003, do not solicit nor accept compensation or personal advancement of any kind.

Respect.

Robert R. "Ron" Solomon
Public Procurement Analyst
CCC 1325624
Tampa, Florida

  


Thursday, January 5, 2017

A direct approach to my specialty, and audience. "Public Roofing Oversight".

Friends:

In the 7 years I've spent with you here, have made great progress for "Fair Competition" in the bidding process for publicly funded projects.  I am of the opinion that you have a right to compete for your own tax dollars, and not be ruled by government "mandates".

The government has a method of choosing "Winners', and "Losers", and this comes in the form of "Purchasing Cooperatives".  Surprised?  "Ron, I thought Purchasing Cooperatives "Save you money because they buy in bulk",  Or, "Our vast negotiating power saves you money".  Both are false, and I can prove it to you through public record, and common sense.

Let us establish that if you are not competitive in the private market, you are not competitive in the public market.  Fair enough?

Purchasing Cooperatives are essentially "Commissioned Salesmen", and have absolutely NO incentive to compete.  In fact, the more something costs, the more commission (typically 2% of the contract amount) they make.

The Cooperative obfuscates the truth through methods of bidding that are impossible to calculate.  One method is "Line Item" bidding, where the bidders fill out many pages of highly detailed individual items.  Then, they cherry pick ONE of those "Line Items" favorable to their "Preferred Vendor".  Voila!, mission accomplished.

It is IMPOSSIBLE to estimate a roof, and provide a hard bid through "Line Items", and not one estimator in any country will refute that statement.  

ROOFING is the costliest item of any school maintenance budget.  ROOFING is also the ONLY TRADE Purchasing Cooperatives" offer.  Is it starting to add up for you?  If they tried this with any other trade (HVAC, Plumbing, Electrician, etc.) they would RIOT!

Roofs purchased through Cooperatives cost an average of 40% MORE than by a "Mainstream Manufacturers (GAF, Firestone, Johns Manville, Carlisle, Barrett, etc)  and local roof consultant. 

The two primary culprits of this deception are Tremco AKA Waterproofing Technologies, and Republic Powdered Metals RPM.  The other is Garland Ind. and their metals division IMETCO.

For the sake of discussion will call them Tremco, and Garland.  Private owners do not use them because they are grotesquely overpriced, and average roofs at best.  It is a complete SCAM.

Please don't take my word for it, and type "School Roofing Scam" into your browser.  Then, do the same thing on YouTube.  You will find no shortage of investigative reports on them there.


Friends, every word I say is backed by public record, and I do not share "Opinions".

Tremco was fined $61,000,000.00 by the DOJ for abusing GSA contracts.  The schools they defrauded got NOTHING.

Tremco, and their attorney are now being sued by the SEC who are insisting on a jury trial. 


See:  http://www.durabilityanddesign.com/news/?fuseaction=view&id=15485 


See:  https://www.sec.gov/litigation/complaints/2016/comp23639.pdf 


For Garland:  (State of New Jersey Commission of Investigation): 

http://www.state.nj.us/sci/pdf/Roofing_Report.pdf   

U.S. Communities illustrates the problem in a big way here:


http://www.ripoffreport.com/r/US-Communities-Government-Purchasing-Alliance/nationwide/Cooperative-Government-Purchasing-US-Communities-the-truth-behind-a-national-scam-All-478352


Cooperative Government Purchasing - U.S. Communities the truth behind a national scam! All States, Counties And Cities: Nationwide


Garland is the "Preferred Vendor" of U.S Communities (another fraud), and pays a 5% "Commission" to the County Commission of Cobb County, Georgia.  As a result, this "Lie" is spread throughout the USA.   


Salesmen" talk administrators into believing this lie, and expose them to great public scrutiny,  They also decimate school maintenance budgets.  NEVER is it okay to call out one manufacturer on a public project.  That is collusion, and bid rigging.  That "Salesman" is getting a 25% "Commission" for misleading you, and cares not about your career as an administrator.

Since we're talking about "Commissions", let's add up what the public is getting for their money.  Cooperative gets 2%, Salesman gets 25%, so your tax dollar just turned into 73 cents and nothing to show for it.  Mainstream manufacturers do not pay commissions to salesmen to "get over" on you.

If Tremco, and Garland, were so "Competitive", why doesn't WalMart, Target, or any other retailer use them?  Because they're not stupid, and using their own money, that's why.

U.S. Communities shills for Garland, and TCPN shills for Tremco.  Completely absent moral, decency, or care for the schools, and taxpayers they defraud.  These purchasing cooperatives actually have seminars on hot to avoid "competitive bidding'.  I find it disgraceful, and you should too.

If you don't value our schools, the taxpayers, and their children, you should at least value your job, and freedom,  I've been through this many, many times, and seen the damage it does.  We will continue the discussion in my next post where I will provide links, and break down their "sales points" into plain English.

I am very thankful for the time you spend with me here, and happy to revise any statements I've made that are factually incorrect.  I can't argue your "emotion", but I can argue  "fact".

The next post will be a real "scorcher", so please stand by.

NOTE: Retired 2003, do not solicit nor accept compensation or personal advancement of any kind.

Reject negativity in all forms, and always remember to keep looking "UP"

Respect.

Robert R. Solomon
Director, Roof Consultant's Alliance
Public Procurement Analyst
CCC 1325620
RobertRSolomon@aol.com


Friday, October 7, 2016

Purchasing Cooperative "Roofing Scam":

Friends: 

I don't know if this "Roofing Scam" is interesting, but it is very real.  The reason purchasing cooperatives ONLY include Roofing, and no other trades!!  Fascinating.  I guess we roofers can have the "leftovers" after the cooperative and government get done with the isolation, and bid rigging. 

Below, you will see actual contract documents, and verbiage.  Here, I do not consider emotion, but rather "measurable units".  It is a stark existence, but feel someone has to stand up, and guess I'm "It".

Simply put:  NEVER buy a roof through a purchasing cooperative.  You will be paying 50%-100% MORE, and receive an "average' roof at best.  Garland, and Tremco are the main culprits, and while everyone in roofing knows the scam, they are afraid.  I have no such inhibition, and and can eliminate the "retribution" aspect.  In other words, I get to play the "Bad Guy" 24 hours a day. 

There is not an administrator in this country that can justify such overspending.

The DOJ busted Tremco fosr $61,000,000.00, and now facing charges from the SEC.  The SEC is suing Tremco, ANDT their attorney (a big stockholder).  SEC is demanding a jury trial for both.  Two minutes of research will reveal the scam in infinite detail.  Also, look for Janet Campbell "School Roofing Scam".  Brilliant stuff.  Respect.

It is WRONG to steal from schools, and I don't like people who do it.  A personal problem I'm afraid.

For those of you keeping score, dig this:

.  

Here are some links on US Communities

US Communities News and Events- note sponsorship of events and production of webinars:

US Communities complimentary “Strategic Sourcing Summits”

Cobb County Purchasing Department is listed as “Lead Agency” for roofing on US Communities website and appears to solicit the nationwide roofing contract

US Communities website states “No User Fees – no costs or fees to participate”, but reading the Cobb County/US Communities agreement please note on page 56 of the pdf item 5.1 under Administration Agreement in this contract and share 5% of their fee with Cobb County Purchasing:

“5.1 Administrative Fees. Supplier shall pay to U.S. Communities a monthly administrative fee based upon the total sales price of all purchases shipped and billed pursuant to the Master Agreement, excluding taxes, in the amount of two percent (2%) of aggregate purchases made during each calendar month (individually and collectively, “Administrative Fees”). Supplier’s annual sales shall be measured on a calendar year basis. All Administrative Fees shall be payable in U.S. Dollars and shall be made by wire to U.S. Communities, or its designee or trustee as may be directed in writing by U.S. Communities. Administrative Fees shall be due and payable within thirty (30) days of the end of each calendar month for purchases shipped and billed during such calendar month. U.S. Communities agrees to pay to Lead Public Agency five percent (5%) of all Administrative Fees received from Supplier to help offset Lead Public Agency’s costs incurred in connection with managing the Master Agreement nationally.”

There are also provisions in the vendor agreement that appear to be more applicable to an organization that is trying to maximize sales vs. a cooperative that is trying to save its users money, such as:

“(d) Sales Commitment. Supplier shall market the Master Agreement through Supplier’s sales force or dealer network that is properly trained, engaged and committed to offering the Master Agreement as Supplier’s primary offering to Public Agencies. Supplier’s sales force compensation and incentives shall be greater than or equal to the compensation and incentives earned under other contracts to Public Agencies.”


Cobb County is listed on US Communities Advisory Board:

Another whistleblower case involving procurement through cooperative:




Interesting article about an association that has come out against sole-source contracting due to the above case:


Joe Tommie is Cobb County's Purchasing Director, and he's out filming commercials for Garland on the taxpayer's dime.  Smells rotten, because it is.

I depend upon the GREED of others, and watch them move like plodding dinosaurs.  All I have to do is remember how important money is to them, and can figure it out from there.  Super predictable.  

I will be spending more time with you here, and offer a "Table of Contents' to make searches easier.

Reject negativity in all forms, and always remember to keep looking "UP" 

I am very thankful for the time you spend with me here, and we are making progress.  

Respect.

Robert R. "Ron" Solomon
Director, Roof Consultant's Alliance (5,000 members)
Public Procurement Analyst
CCC 1325620
RobertRSolomon@aol.com

Wednesday, September 14, 2016

RPM (Tremco) Facing SEC Fraud Case.

Thank you to the wonderful people at Durability + Des8ign.
http://www.durabilityanddesign.com/news/?fuseaction=view&id=15485

Note the SEC is demanding a jury trial.  
This is going to get ugly, and not long after the DOJ fined them $61,000,000.00 for abusing GSA contracts.  If Tremco fell of the earth's surface tomorrow, nobody would miss them.

Purchasing Cooperatives who enable them are just as responsible, and I hope they get a good "Wut Fer" as well.




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RPM Faces SEC Fraud Case

Wednesday, September 14, 2016

More items for Building Envelope
Comment|More

The U.S. Securities and Exchange Commission has charged RPM International Inc. and its general counsel with disclosure and accounting fraud stemming from a Department of Justice investigation regarding roofing materials and services provided to the government.
According to the agency’s statement, RPM and Edward W. Moore, 59, “failed to disclose a material loss contingency, or record an accrual for, a government investigation when required to do so under governing accounting principles and securities laws.”
Meanwhile, RPM leaders say the allegations are without merit.
Tremco Case
The SEC’s complaint, filed Friday (Sept. 9), says that from 2011 through 2013, RPM and its subsidiary Tremco Inc.—a manufacturer of roofing materials, construction sealants and waterproofing systems—were under investigation by the DOJ for overcharging the government on certain contracts.
RPM settled the DOJ investigation and litigation for $65.1 million in August 2013.
accounting
© iStock.com / Sky_Blue
The SEC announced it had lodged a disclosure and accounting fraud case against RPM International for failing to disclose a loss contingency or record an accrual for an investigation by the Department of Justice.
As RPM's general counsel and chief compliance officer, Moore allegedly oversaw RPM's response to the DOJ investigation, the SEC said. However, Moore did not inform RPM's CEO, CFO, Audit Committee, and independent auditors, of material facts about the investigation, the complaint alleges.
For example, Moore reportedly “knew but failed to inform” RPM executives that:
  • RPM sent DOJ estimates showing RPM's subsidiary overcharged the government on the contracts under investigation by a material amount;
  • RPM agreed to submit a settlement offer by a specific date to resolve the DOJ investigation; and
  • Prior to submitting the settlement offer to DOJ, RPM's overcharge estimates increased substantially to at least $28 million.
Misleading Documents
The SEC alleges that RPM filed multiple false and misleading documents with the SEC because of Moore’s actions. For example, RPM allegedly failed to disclose in its SEC filings:
  • Any loss contingency related to the DOJ investigation, or to record an accrual on its books, when required to do so by governing accounting principles and the securities laws; and  
  • A material weakness in its internal control over financial reporting and its disclosure controls when in fact such weakness existed.
“Because of RPM’s false and misleading SEC filings, investors were not timely informed that a material loss relating to the DOJ investigation was reasonably possible or probable,” the complaint states. “Investors also were not timely notified of a material weakness in RPM’s internal control over financial reporting and its disclosure controls.”
In August 2014, RPM did restate its financial results for three quarters that occurred during the DOJ investigation and filed amended SEC filings for those quarters, disclosing the DOJ investigation and related accruals, the commission said in its announcement. In the restated filings, RPM also disclosed errors relating to the timing of its disclosure and accrual for the DOJ investigation.
RPM
RPM International
The DOJ investigation in question occurred between 2011 through 2013, when RPM and one of its subsidiaries—roofing materials, construction sealants and waterproofing systems company Tremco Inc.—were under scrutiny for overcharging the government on certain contracts.
“RPM’s restatement thus confirmed that the company’s original SEC filings referenced above were materially false and misleading,” the complaint notes.
Rules Cited
The SEC's complaint charges RPM with violating specific antifraud provisions of the federal securities laws of the Securities Act of 1933; reporting provisions of the federal securities laws of the Securities Exchange Act of 1934 and rules thereunder; and the books and records and internal controls provisions of the federal securities laws of the Exchange Act.
The complaint also charges Moore with violating certain sections of the Securities Act and rules under the Exchange Act.
The complaint seeks permanent injunctions, repayment of “ill-gotten gains” plus interest and penalties.
RPM’s Response
In response to the enforcement action, RPM’s CEO, Frank C. Sullivan, issued a statement Friday asserting that “the restatements had no impact on the audited results for the fiscal year ended May 31, 2013, and the company's audit committee concluded that there was no intentional misconduct on the part of any of its officers.”
Sullivan added: "We believe the allegations have absolutely no merit and are the product of prosecutorial overreach. We intend to vigorously defend ourselves and expect our position to be vindicated in court."
Further, RPM filed a Form 8-K with the SEC on Friday, stating that the company has “cooperated with the SEC’s investigation and believes the allegations mischaracterize both the company’s and Mr. Moore’s actions in connection with the matters related to the company’s quarterly results in fiscal 2013 are without merit.”
The filing also noted its confidence in Moore’s integrity and conduct.
RPM International is the parent company of Carboline, Tremco and dozens of other coating, sealant and chemical brands. The company is based in Medina, OH.
The SEC has demanded a jury trial.
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Reject negativity in all forms, and always remember to keep looking "UP".
Respect.

Ron