This story has been updated.
The state has terminated the contract of a West Haven hazardous waste remediation company ensnared in the federal investigation into former state official Konstantinos Diamantis.
The state did not offer any explanation for why the contract was ended other than “it would be in the best interest of the state.”
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AAIS Corp. was one of several companies named in a subpoena by a federal grand jury investigating Diamantis, who ran the state Office of School Construction Grants & Review until he retired in October 2021. Municipal officials have said Diamantis pressured them to hire specific contractors, construction managers and hazardous waste and asbestos removal companies, including AAIS.
A CT Mirror investigation last February revealed that AAIS and a second company, Bestech Inc. of Ellington, got all but 15 of the 284 purchase orders issued by the state for hazardous waste disposal and demolition from fiscal year 2017 through February 2022.
The same day the CT Mirror asked questions about the contract in February 2022, the state Department of Administrative Services cancelled the contract. Months later, DAS created a new contract that included six vendors, including AAIS, and later amended it to limit its use.
In a letter dated Jan. 9, 2023, Robert E. Burk, the Director of Procurement Programs and Services for DAS, informed AAIS officials they were terminating them from state contract 20PSX0154 effective immediately.
“DAS has determined that it would be in the best interest of the State of Connecticut to terminate the Contract,” Burk wrote. “I am taking this action pursuant to the authority granted to me under the Connecticut General Statutes and, more specifically, the provisions of Section 33 of the Contract.”
The letter said the termination would take effect the next day and that there were no jobs left that AAIS needed to complete.
A man who answered the phone at AAIS offices in West Haven said that the company would have no comment on the state’s decision or whether they planned to fight it.
The state’s decision to disqualify AAIS comes at a time when the state Department of Administrative Services is waiting to receive an audit report about the demolition and abatement contracts that the state authorized in recent years.
DAS hired Marcum LLP, an independent auditing firm, in early 2022 to look into those contacts. It paid the firm to review several dozen abatement contracts and to analyze some of that work to ensure the contractors didn’t improperly bill the state.
DAS officials told the CT Mirror this week that audit report was not complete yet.
[The Kosta Diamantis timeline]
Despite the move in 2022 to spread out the work, AAIS was still paid far more for remediation until its termination than other companies, documents show.
Since the amended contract went into effect on March 1, 2022, there have been 48 payments through the contract totaling about $1.26 million, according to records from the Office of the State Comptroller.
Of those 48, AAIS received about $1.2 million through 42 of them, records show. Three other companies, Bestech, Haz-Pro and New England Yankee Construction, were each paid twice.
From the 2017 fiscal year through February 2022, the state paid about $29.2 million for hazardous waste and asbestos abatement work under DAS contract 16PSX0110. AAIS received $20.6 million of that and Bestech $8.2 million, purchase orders show — about 98.8% of all the money spent through the contract.
The state issued 284 purchase orders under the emergency contract. AAIS was named on 214 purchase orders, including exclusive agreements to do work at all state colleges and vocational schools. Some of the work was assigned by other state agencies, such as the Military Department, but the majority were assigned by DAS.
One of the contractors, Haz-Pros, got five jobs. Environmental Services Inc. got 10. Bestech Inc. got the remaining 55.
DAS contract 20psx0154 added more contractors to the emergency list. In addition to AAIS, Bestech and Haz-Pros, four new companies are included: Manafort Brothers Inc., New England Yankee Construction, Omni Environmental and Stamford Wrecking Company, which had been battling the state for nearly a year.
The new contract soon included guidelines that placed restrictions on when towns can hire the companies on the state’s approved list, including that they can be used only for minor rehabilitation projects that cost less than $500,000 and “emergency projects,” defined as work that needs to begin within 24 hours. Demolition projects were explicitly excluded from the contract.
The original DAS contract was designed to be an on-call emergency list for towns to use for hazardous waste abatement ranging from asbestos removal to mold remediation in state buildings.
But under Diamantis, many municipalities started using the list to bid for hazardous waste removal and demolition on school construction projects.