Item 9BM E M O R A N D U M
(April 6, 2010)
To:Shana Yelverton, City Manager
From:Robert H. Price, P.E., Director of Public Works
Subject: Consider termination of the contract with Municipal
Construction, Inc. for Highland Street Paving and Water
System Improvements
Action
Requested:
Consider termination of the contract with Municipal Construction,
Inc. for Highland Street Paving and Water System Improvements.
Background
Information:
The Highland Street Paving and Water System Improvements
project was awarded to Municipal Construction, Inc. on March 3,
2009.
Municipal Construction began the construction of the 12” water line
and appurtenances in the May 2009.Municipal pulled off of the
project in July 2009 because of conflicts with one of the franchised
utility companies which had not been completely resolved prior to
Municipal beginning work. The contractor was notified by the
inspector in early September that the utility relocation work was
complete as of August 31 and that the contractor was to return to
work. was also notified at this time. The contractor failed to return
to work.
The Public Works staff contacted Municipal Construction and the
bonding company, Western Surety, via letter on September 17,
2009 to notify them of the city’s dissatisfaction with the progress of
the Highland Waterline and Paving project. After an unsatisfactory
response was received from Municipal Construction, a follow up
letter was sent to Municipal Construction on October 15, 2009
expressing the City’s intent to request the bonding company take
action on the project if the contractor did not return to work.
As you may recall, staff briefed Council on this matter on October
20, 2009 in Executive Session.
Subsequently, the City Attorney in conjunction with Public Works
staff sent a demand letter to Western Surety, Municipal
Construction’s bonding company on October 30, 2009.
Throughout the Fall of 2009, city staff had difficulty in getting the
contractor to be responsive and to return to work.
Subsequently, City staff and a representative of the City Attorney’s
office met with representatives of the contractor and
representatives of a major subcontractor on November 11, 2009.
On December 10, 2009, a Connect CTY message was sent to the
residents along Highland apprising them of the current status of the
project.
Through November and December, the City and Municipal
Construction exchanged letters, but Municipal did not return to
work. A second demand letter was sent to the bonding company
on January 22, 2010 making legal demand for the bonding
company to take action.
On February 24, 2010, staff issued a follow-up letter to the bonding
company dispatching additional project information and asking for a
schedule of the remaining work. CNA Surety is representing
Municipal Construction and Western Surety and is handling our
claim against Municipal Construction for abandonment of the
Highland Street waterline project. Staff met with representatives of
Municipal Construction, CNA Surety and the City Attorney’s office
on March 12, 2010 to discuss the steps necessary to complete the
project. CNA Surety has taken the position that the contract has
not been terminated and therefore, it cannot take action to hire a
new contractor to complete the project.
The result of the meeting is that the City will provide revised plan
sheets and a notice to proceed to Municipal Construction and that
Municipal would mobilize and return to work within seven (7) days
of the date of the notice to proceed. The notice to proceed was
issued on March 25, 2010 directing Municipal to return to work on
April 5, 2010. They were also requested to provide contact
information for the project manager/superintendent, a schedule,
and a list of subcontractors.
Financial
Considerations:
The contract amount is $922,253.73. If the Council chooses to
terminate the contract with Municipal Construction, staff
anticipates that the bonding company will complete the contract
within the current contract amount.
Strategic Link:
The construction of the 12” water line along Highland Street from
Shady Oaks to SH114 and the rehabilitation of the Highland Street
pavement from Shady Oaks Drive to SH 114 and the pavement
overlay in the Woodland Heights neighborhood links to the city’s
strategy map relative to the focus areas of Mobility, Infrastructure,
and Performance Management and Service Delivery. The specific
corporate objectives that are met by this construction project
include: Providing high quality customer service, Investing to
provide and maintain high quality public assets, and Providing
travel convenience within city and region.
Citizen Input/
Board Review:
None
Legal Review:
The City Attorney has been involved in all discussions with the
contractor and the bonding company since the dispute began..
Alternatives:
The Council may terminate the contract with Municipal
Construction, Inc. or not.
Supporting
Documents:
Location Map
Staff
Recommendation:
Consider termination of the contract with Municipal Construction,
Inc. for Highland Street Paving and Water System Improvements.
Staff Contact:
Robert H. Price, P.E., Director of Public Works
Gordon J. Mayer, Jr., P.E. Deputy Director of Public Works
Cheryl Taylor, P.E. Civil Engineer