The Humboldt County Board of Supervisors on Tuesday approved several agreements which will allow construction work at the county’s Juvenile Hall Replacement Facility Project (Project) to resume immediately.
Work at the Project has been on hold since the county terminated the original Project construction contract with Hal Hays Construction, Inc. (HHCI) for default in November 2018.
Concurrent with the termination of the contract, the county asserted claims against the Project performance bond issued by the Project surety, Western Surety Company (Western), due to the contractor’s defaults. After Western completed its investigation of the county’s claims, the county and Western engaged in significant negotiations over the span of several months concerning numerous outstanding issues regarding completion of the Project. The agreements approved by the Board are the culmination of the dialogue and negotiations between the county and Western. These agreements not only allow the Project work to resume immediately, but they require the performance of the remaining work in accordance with the design and requirements of the original construction contract while also mitigating cost and risk exposure to the county.
Under the terms of the agreements approved today, Western is required to complete the Project by the end of August, 2020. The county will also receive payment of damages in the sum of $675,000 for Project delays incurred to date. Should completion be delayed again, the county may resume its assessment of liquidated damages against Western until such time as the Project is completed.
Should the costs to complete the Project exceed the remaining balance due under the original contract, Western shall be responsible for all such additional costs pursuant to the terms of the Takeover Agreement.
To satisfy its obligations with respect to the completion of the Project, Western has assigned its principal under the performance bond, HHCI, to serve as its licensed completion contractor pursuant to a separate agreement between Western and HHCI (however, it is anticipated that HHCI will not self-perform any of the remaining work). In addition, Western has also agreed to assign, at its cost, a third-party construction consultant, Benchmark Consulting Services, LLC, to be Western’s authorized representative and to manage Western Surety’s completion contractor. Western is obligated to complete the Project in the event any contractor performance issues arise, and should the completion contractor default or be unable or unwilling to adequately perform work, Western shall “promptly arrange for the remaining Project work to be completed by another completion contractor.”
The county has been aware of the acute need to complete this Project in order to bring the new juvenile hall facility into service, and the county, through its Public Works Department, has worked tirelessly to achieve that goal despite the many procedures required to be followed as a result of the termination of the original contract. The county is pleased that the completion work at the Project is poised to resume without further significant delay, and pursuant to agreements which significantly mitigate costs and risk to the county associated with this Project.
The county looks forward to a successful working relationship with Western and its Project team as they advance the Project to final completion.
For additional information concerning the Project, please contact Tom Mattson, Public Works Director for the county, at 707-445-7491.