The construction contractor who built the southern extension of Butterfield Boulevard filed a claim for about $2 million in damages with the City of Morgan Hill, though the parties are working on a settlement of the dispute over the project’s delays and cost overruns, according to a source from RGW Construction.
In a letter to City staff dated Nov. 8, RGW Construction Operations Support Manager Robert Purdy itemizes more than $2 million worth of expenses on the project which the company says the City owes for their work on the Butterfield project. These cost overruns include “unpaid extra work” and “unpaid quantities.”
The city hired RGW Construction to build the new roadway project for a $14.9 million contract in April 2011, but City staff reported in September the final total cost for the project came out to about $15.2 million.
City staff claim RGW Construction is responsible for delays adding up to 147 days past schedule, and the contractor owes the City for performing unauthorized work. The total penalties and reimbursements the City claims RGW owes on the project is about $321,000, and the City is withholding a portion of a 10-percent “retention” fronted by the contractor before construction started.
The roughly 4,000-foot roadway extension opened in May, extending Butterfield Boulevard from its previous terminus at Tennant Avenue, in a southwesterly direction to Monterey Road where it connects with Watsonville Road.
Now, in response to RGW’s Nov. 8 claim, the City has asked the Morgan Hill Redevelopment Oversight Board to hire Riedinger Consulting for a maximum of $35,000 for “construction scheduling analysis” for the Butterfield Boulevard southern extension project. The Oversight Board is scheduled to consider the consultant’s contract at Wednesday’s meeting, as part of the consent calendar.
The consultant has done similar work on the project in April, when it became apparent to the City that the project was not going to be completed by the target date and the dispute started brewing, according to a City staff report.
“That initial evaluation provided staff with an independent review of the project delays at that time and was used to support staff’s position during subsequent resolutions with the contractor,” the City staff report says.
Riedinger Consulting will be asked to review the contractor’s past monthly and weekly schedules on the project, letters, meeting minutes, inspection logs, project photos, e-mails, requests for information and change orders, according to the City staff report.
RGW Operations Manager David Kennedy declined to comment on the details of the dispute out of fear of derailing a potential settlement. He said the City and the contractor are “actively working on” a mutually agreeable settlement of the dispute.
City staff reported in September the Butterfield Boulevard extension required 21 change orders, which cost about $937,000.
Construction on the project started in the winter of 2012. The total budget for the project, including property acquisitions for the right-of-way, was about $22 million.
