The Virginia Electric and Power Co. disclosed yesterday that it is investigating allegations that some of its subcontractors may have deliberately overcharged Metro and other Vepco clients for construction work.
The investigation came to light as the result of a billing dispute--resolved later in the day--between Vepco and Metro. The transit authority had questioned whether the utility had overcharged it by a half-million dollars for electrical installations on the Orange Line.
Vepco, according to a company spokesman, recently began its own internal investigation after being told by two former subcontracting employes about the alleged overcharges. The utility has also informed the FBI and Northern Virginia's commonwealth's attorneys about the allegations.
"We don't want to be overcharged either, and we've got our folks looking at this," said James Buck, Vepco's director of media and community relations for Northern Virginia. "We're not padding the bills, not knowingly at least."
The allegations of overcharges were made public yesterday after an article in the Journal newspapers reported that Metro had sent a letter to Vepco complaining of overbilling.
Buck declined to name the firm or firms named in the allegations and refused to speculate on how much money might be involved. "I don't think we're talking about vast amounts of money," he said.
John S. Egbert, who wrote the letter to Vepco as Metro's assistant general manager for design and construction, said late yesterday that he is now satisfied that the costs he criticized "are real." He said recent cost overruns for utility installations coupled with knowledge of the allegations--which also had been made to Metro--had prompted him to write the letter.
Egbert had complained in the letter that Metro was billed more than $2 million for a Vepco installation that auditors revealed should have cost about $1.5 million. But the Metro official said yesterday, after meeting with Vepco officials, that he had mistaken an earlier cost estimate for a final bill and that both sides now agreed on $1.5 million as the final cost.
Under a system that Egbert said needs to be tightened up, Vepco bills Metro on the basis of estimated costs. But the final bill is always revised according to audit findings.
In other Metro matters, Metro board members yesterday postponed action on $25 million in proposed budget cuts and delayed a decision affecting hearings on the realignment of the Green Line through Anacostia and southern Prince George's County. A federal judge has stopped funding of the Metro line pending new public hearings.
Board chairman Jerry Moore had set June 8 for hearings on the disputed line in the District of Columbia. But staff members said yesterday that the work they have left to do in preparation will probably push the hearings back until later that month.