The Emanuel administration gave 10 contracts worth as much as $43 million to a Chicago sewer and excavation company after federal inspectors cited the business twice for serious workplace-safety violations on city jobs.
City officials say they hadn’t been aware of the safety citations and resulting fines, totaling $150,000, on the two sewer jobs when they gave Pan-Oceanic Engineering Co., Inc. the millions of dollars in additional business.
They say they are now investigating and that the Northwest Side company potentially could lose its current city contracts and be barred from getting future city business, though it’s being given a chance to show it’s in compliance with its contracts and city regulations.
“Pan-Oceanic did not provide any notification to the city about the two 2014 trenching citations,” says Cathy Kwiatkowski, a spokeswoman for Chicago’s Department of Procurement Services. “Because the lack of notification is a violation of their contract, the city has sent Pan-Oceanic a letter demanding that they disclose any inspections or citations on city projects and submit a compliance plan within 10 days.”
Pan-Oceanic, which opened in 1998, also had been cited for safety violations five times before, starting in 2007, and placed in a federal program for “severe violators” that’s designed to trigger stepped-up inspections and enforcement.
Gulzar Singh, the company’s owner and president, says he’s taken steps to assure his workers’ safety.
Singh says the “safety of my employees is very important to me. Currently, with the help of third-party safety professionals, I have implemented an extensive safety-enhancement program.”
That includes “unannounced site inspections by a third party to monitor my company’s safety and compliance,” says Singh, who has made political contributions himself or through his company totaling more than $25,000 in recent years to political groups and candidates including Ald. Joe Moore (49th) and Chicago schools chief Forrest Claypool when he was running for Cook County Board president.
No one was hurt on either of the two city jobs for which Pan-Oceanic, which contracts with the city Department of Water Management to do sewer and drain work, was cited by the federal Occupational Safety and Health Administration in 2014.
Both citations were for having employees working in unsafe trenches — a safety hazard, according to OSHA and experts who say dozens of workers across the United States die in trench collapses every year.
In each case, inspectors acting on anonymous phone tips found that Pan-Oceanic crews were working in unsafe pits dug to reach city sewer lines for installation and repair work.
In the first instance, in 2013 on a job in the 1000 block of North LeClaire in Austin, an OSHA inspector found a worker in an unprotected trench that was nearly nine feet deep, federal records show. And though work was already under way, the trench hadn’t been shored up, as required, and the materials that were supposed to be used to shore it up were found above-ground.
Federal safety rules require that trenches deeper than five feet be protected against cave-ins.
And records show the inspector learned that another crew member had warned the site supervisor on the job that the supports needed to be put in place but was told in response “not to worry about it.”
An administrative law judge upheld the OSHA citation, fined Pan-Oceanic $50,000 and wrote, “What most concerns the court in this case is the gravity of this violation and respondent’s repeated disregard of the requirements of the cave-in protection standard.
“Working in an unprotected trench is incredibly dangerous and exposes employees to serious injury, often involving death,” the judge wrote.
Under city rules, contractors are required to notify City Hall “immediately” any time their job sites are visited by OSHA inspectors. They also are required to forward copies of any citations to City Hall.
Pan-Oceanic didn’t do either of those things, city officials say.
According to an OSHA spokesman, the federal agency generally doesn’t notify government or private businesses when it cites one of their contractors.
Four months after the inspection at the LeClaire Street job site on the West Side, a second anonymous tip brought an OSHA compliance officer to another Pan-Oceanic work site, this one on the South Side at South Woodlawn Avenue and East 93rd Street. The inspector reported finding two workers in an unprotected 12-foot trench.
That infraction resulted in a proposed penalty of $147,000 that, after negotiations with the company, OSHA agreed to reduce to $100,000.
The LeClaire Street work was part of a $7.5 million city drain-repair contract on the North Side and the West Side. The Woodlawn Avenue work was part of a $3 million project to install new sewer pipes on the South Side.
