Supervisor Don Gage is not worried about the outcome of a
long-simmering dispute between Santa Clara County and West Bay
Builders, the contractor hired to build the new South County
Courthouse who claims the county owes the company nearly $20
million more than the already agreed-upon price tag.
Supervisor Don Gage is not worried about the outcome of a long-simmering dispute between Santa Clara County and West Bay Builders, the contractor hired to build the new South County Courthouse who claims the county owes the company nearly $20 million more than the already agreed-upon price tag.
“We’ll prevail,” Gage said. “We’ll come out with damages for delays and faulty work that occurred (during construction of the courthouse).”
Gage said the contractor is responsible for what amounted to years of delays in completing the $52 million project. West Bay’s president Paul Thompson says those delays were caused by county staff who designed the facility with numerous errors and omissions.
“It’s been a complete nightmare,” Thompson said, listing the seemingly endless snafus that continued throughout the construction process, which ultimately took about five years.
Both parties are still guardedly hopeful that a two-day session with one of the Bay Area’s most well-known mediators will resolve the dispute. The mediation is scheduled for today and Wednesday in Berkeley. The county and the contractor split the roughly $25,000 cost of fees for mediator Randy Wulff.
Ultimately, West Bay and dozens of subcontractors are seeking $17 million in damages, about three-quarters of which is requested by the subs, according to Thompson. The county says it doesn’t owe the builders another dime, and in fact says it is owed up to $5 million for “liquidated damages associated with late completion,” county project manager Ken Rado said.
The original contracted amount for West Bay is about $36 million, and the county is currently withholding about 10 percent of that, plus the damages to which it says it is entitled, Rado said.
Any agreement that might be reached at mediation would not be binding. In the event that the two parties cannot resolve their disagreement, it will proceed to “full-blown litigation, World War III, millions of dollars in legal fees,” Thompson said.
As Gage put it, “If (the mediation) goes in our favor, he’s going to appeal. If it goes in his favor, we’re going to appeal.”
Thompson said the county submitted drawings that required clarification to the builders, and incomplete design details. The county also issued 500 changes in work orders, and the contractor and subs had to submit 700 estimates for additional work related to corrections in the designs, Thompson added.
“That adds time, and we can’t proceed with the work until we get written authorizations,” he said, and at certain times during construction the builders were “demobilized” as they waited for approval for changes, and then had to bid out the work for those changes.
Even though the courthouse has been open and processing cases and court-related services for more than a month, Thompson said subcontractors still have work to do that was requested by county staff in charge of the project. Just last week, he said, a subcontractor was on the site resolving an error with the heating and air-conditioning system.
Rado declined to discuss details of the dispute. He noted that the board of supervisors has not yet accepted the project because of the unresolved claims. However, he said although the county and the contractor are “fairly far apart” in their positions, Wulff’s reputation as an effective mediator makes him hopeful that the case won’t go to the courts.
“I’m hoping we can resolve (our differences), but these are some very difficult issues,” Rado said. “I’m optimistic but I don’t have any expectations.”
Gage is not even concerned about the potential hardship of coming up with funds to pay out any potential court-ordered damages while the county struggles with a $270 million deficit going into next year.
“We’re not going to owe anything outside of legal fees, and we’ll probably collect those too,” he said.
