A construction company hired last year to replace water mains on Belgrade’s north side has sued the city for breach of contract, failing to pay as agreed and a litany of other wrongs.
W Construction filed the lawsuit Wednesday in District Court in Bozeman. The company has been a topic of discussion at closed-door Belgrade City Council meetings since May, when the city terminated its $2.4 million contract nearly a year after work began.
The lawsuit also named the city’s engineer, Keith Waring, and the Bozeman engineering firm Thomas, Dean and Hoskins, Inc., which designed the project.
The city awarded W Construction the bid June 7, 2010 to replace more than 19,000 feet of leaky, aging water mains. The job was split in two phases. The first would replace water mains under north-side streets during the summer and fall of 2010. The second phase, to begin this spring, would replace sewer and water lines in the alley immediately north of Main Street from Quaw Boulevard to Davis Street.
But delays and other problems caused Phase 1 to linger into November before winter shut down the project, which remains unfinished. Work on Phase 2 never started, according to city records.
On May 2, the Belgrade City Council voted after a closed-door meeting to terminate the contract “for cause,” though the city has never disclosed the reasons.
“W Construction was unjustly terminated and treated abusively and unfairly during the project,” Richard Campbell, a Spokane, Wash.-based attorney representing W Construction, said in an email Thursday.
The company, he added, “looks forward to proving its case at trial, recovering the damages it sustained at the behest of the city of Belgrade and the engineers, and ultimately rehabilitating its reputation.
In its complaint, W Construction said it encountered a host of problems with the project, some of which caused delays and added costs to the overall project. The city, it said, refused to pay those claims.
“During the course of construction, W Construction encountered events which through no fault of its own increased its costs of performance,” attorneys wrote. “W Construction submitted claims to TD&H and the city for recompense.”
“TD&H and the city denied or ignored these claims,” attorneys wrote.
W Construction’s attorneys also said city officials told the company during an April meeting they would notify the company by April 12 if the contract was to be terminated, but did not. Meanwhile, the company was “prevented from obtaining other work during the suspension period,” which resulted in financial problems, they allege.
“The city’s and TD&H’s conduct has also caused W Construction damages in the form of key personnel losses, loss of its bonding capacity, impairment of its bank credit, loss of its business reputation, and otherwise devastated its business — all which have caused monetary damages...” the lawyers wrote.
According to the complaint, “The city also informed W Construction that it would extend the project duration for Phase One, remove the inspector from the project, an that it would delete the Phase Two alley work from the contract because it no longer had the funding to pay that work.”
City Manager Joe Menicucci said the city had enough money for both phases and that W Construction’s allegation is “not true.” He declined to comment further, referring questions to City Attorney Rick Ramler. Someone who answered the phone in Ramler’s office said Ramler is out of the office until next week and unavailable to comment for this story.
Since work began last year, the project experienced setbacks, including four Occupational Safety and Health Administration citations issued to W Construction for “exposing employees to trench cave-in hazards.”
Throughout last summer, Waring and Menicucci regularly reported to the council that the project was behind schedule, according to city records.
Seven companies bid on the contract, with W Construction submitting the lowest bid at $2.4 million, according to city records. Sime Construction, Inc., which did similar work on the city’s south side, was next lowest at $2.5 million.
At the time of the bid award last year, Councilman Mark Criner said he was “concerned to start with a new company because the current company (Sime) has not had many complaints,” according to minutes from the meeting. Mayor Russ Nelson expressed similar concerns throughout the 2010 construction season.
The infrastructure work was deemed necessary by a 2008 water study that showed the city was losing roughly 40 percent of its pumped water to massive leaks in the water mains. The main culprit was identified as leaded joints connecting the mains together.
The goal of the job, which replaced those mains with 10-inch pipe, was to stop that loss and improve service delivery and fire flows.
The project remains stalled, though city officials said recently they hope to clear up issues surrounding the W Construction contract and rebid the project yet this year.
W Construction attorney Campbell said in an email that he believes the city would be better served spending money on something other than litigation.
“It is unfortunate the city of Belgrade has chosen to spend its tax revenue on lawsuits,” he said.
The lawsuit is attached.