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Home My WebLink AboutMINUTES - 12141999 - SD10 250-9842/C.1.3 I TO: BOA" OF SUPERVISORS FROM: BARTON J. GILBERT, DIRECTOR OF GENERAL SERVICES Contra a DATE: December 14, 1999 Costa County ty i SUBJECT: TERMINATE CONTRACTOR'S RIGHTS UNDER CONSTRUCTION CONTRACT FOR TECHNICAL SERVICES ADMINISTRATION BUILDING,30 GLACIER DRIVE,MARTINEZ;ASSESS LIQUIDATED DAMAGES;AND AUTHORIZE COUNTY COUNSEL TO PURSUE LEGAL REMEDIES(WH354H) SPECIFIC REQUESTS OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION 1. RECOMMENDATION A. DECLARE that Phoenix National Inc. ("Phoenix")is in material breach and default of its contract dated October 27, 1998 for construction of the Technical Services Administration Building project for each of the reasons set forth below, and TERMINATE and CANCEL Phoenix's rights under the contract on these grounds. B. Pursuant to the contract documents,ASSESS liquidated damages of$33,500.00(67 days x $500.001day)in an amount to be determined for construction delay for the period between October 8, 1999 and December 14, 1999,plus$500.00 per day between December 15, 1999 and the final completion of the project. C. AUTHORIZE the County Counsel to pursue appropriate legal remedies, including the filing and prosecution of lawsuits, against Phoenix,Hartford Fire Insurance Company,and other parties responsible for the damages and expenses incurred by the County. II. FINANCIAL IMPACT Costs will be covered by funds deducted from the contract balance for the remaining work. III. REASONS FOR RECOMMENDATIONS/BACKGROUND A. On October 27, 1998, the Board awarded the construction contract for the Technical Services Administration Building project, located at 30 Glacier Drive,Martinez to Phoenix ofFallbrook, California. The contract required completion within 300 calendar days from the starting date. CONTINUED ON ATTACHMENT:_,,X—YES SIGNATURE: RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE APPROVE OTHER SIGNATURES ACTION OF BOARD ON Deer 14 1999 APPROVED AS RECOMMENDED XX OTHER The following people appeared to speak: David Perkins, Esq., attorney for contractor, 750 B Street, #2800, San Diego and Craig Bachmann,Phoenix National, 1588 S. Mission Rd., Ste 200, Fallbrook. No one else desiring to speak,the Board then took the following action: APPROVED staff s recommendations as listed above. VOTE OF SUPERVISORS __..$3 UNANIMOUS(ABSENT — 1 AYES: NOES: ABSENTS: ABSTAIN: MEDIA CONTACT: BARTON J.GILBERT(313-7100) CC: General Services Department I HEREBY CERTIFY THAT THIS IS A TRUE Architectural Division AND CORRECT COPY OF AN ACTION TAKEN AND G.S.Accounting O SUPERVISORS BOARD ORS ON THE DATE SHOWN. Pile: 250-9842/A.5 County Administrator's Office ATTESTED December 14,1999 County Counsel PHIL SATC LOR,CLERK OF THE BOARD OF Auditor-Controller SUPERVIS S 4ND COUNTY ADMINISTRATOR Contractor(Via AID) Sheriff-Coroner Dept.(Via A/D) By DEPUTY H:11998\2509842181.042146b.doo Rev.12/9189 GB:Is Page i o4 2 M382(10/88) TERMINATE CONTRACTOR'S RIGHTS UNDER CONSTRUCTION 250-9842/C.1.3 CONTRACT FOR TECHNICAL SERVICES ADMINISTRATION December 14, 1999 BUILDING, 30 GLACIER DRIVE,MARTINEZ; ASSESS LIQUIDATED DAMAGES, AND AUTHORIZE COUNTY COUNSEL TO PURSUE LEGAL REMEDIES (WH354H) B. Can December 1, 1998 a notice to proceed was issued with a starting date of December 2, 1998 and a contract completion date of September 28, 1999. As a result of change order work required of Phoenix, the completion date was later extended to October 8, 1999. As of November 15, 1999, the project was only approximately 65%complete. C. For an extended period of time,Phoenix and its subcontractors have failed to supply sufficient materials and workers to complete the project work. D. Phoenix has been repeatedly notified orally and in writing of the lack of progress, and other problems. Despite these notices,Phoenix has failed to adequately address the above-described deficiencies. On November 2, 1999 notice was sent to Phoenix and its bonding company (Hartford)by fax and certified mail, return receipt requested. The notice required Phoenix,no later than November 12, 1999,to 1) submit a revised progress schedule and 2)return to the jobsite with sufficient materials and workers to complete the work without delay, and warned Phoenix that, if these things were not done by the deadline, the County would complete the work in accordance with Section 11 of the Contract and that Phoenix would be subject to liquidated damages in accordance with Section 5 of the Contract. Phoenix failed to meet the deadline and has continued in its failure to supply sufficient materials and workers to complete the job. E. On November 2, 1999 the bonding company(Hartford)was also sent a letter by fax and certified mail,return receipt requested, informing them of the lack of progress, urging them to take immediate action to remedy the situation and requesting them to indicate,no later then November 15, 1999,whether it is prepared to arrange for another licensed contractor to take over and complete the contract work should Phoenix fail to comply with the conditions of the November 2, 1999 letter sent to Phoenix. No response was received by the deadline. F. Stop notices totaling more than$66,000.00 have been filed by subcontractors and material suppliers who have not been paid on this job. Others have indicated that they also have not been paid and may be filing strip notices. The unpaid contract funds are insufficient to finish the project work and to pay the stop notices received and expected to be received. This creates a practical impediment to Phoenix finishing the job,because it is unlikely that the unpaid claimants will resume work on the job. G. During the course of the job,Phoenix has used at least one subcontractor that was not listed in the original bid and whose substitution was not approved by the County. This constitutes violation of the Subletting and Subcontracting Fair Practices Act(Public Contract Code Sections 4100-4114). Under Public Contract Code section 4110, a contractor that violates that act also violates its contract and the awarding authority may, in its own discretion,terminate the contract rights. H. It is recommended that the Board terminate and cancel Phoenix's rights under the construction contract for each of the deficiencies listed above, direct that the Director of General Services proceed with the completion of the project, assess liquidated damages, and authorize the County Counsel to pursue appropriate legal action,including the filing and prosecution of lawsuits, against Phoenix, its bonding company and any other responsible parties. HAI 9981250984218LQ42106b.doc Page 2 of 2 M382(10188)