December 1, 2022 |
Saratoga Town Council faces a tough decision as it deals with the contractor who fell behind schedule with the Spring Avenue waterline and street paving project. The town can play hardball and stick to the terms of the contract which include fees and penalties of nearly $2,000 per day throughout the winter. Or a change order can be drawn up erasing the fees in hopes the contractor returns next year. Each option carries risks.
As reported by Bigfoot 99, Lewis & Lewis, the contractor responsible for replacing the aging water line on Spring Avenue in the heart of downtown and repaving the street is a month behind the scheduled completion date. Weekly meetings between the town and the contractor have focused on beating Mother Nature and the arrival of winter. Ground frost has made digging difficult and caused delays with street paving. With no break in the cold weather in the forecast, Lewis & Lewis asked the town to allow them to shut the job down for the season.
A winter shutdown was the topic of a special workshop Tuesday night between town council, the Impact Joint Powers Board, and Lewis & Lewis.
Josh Ward, the contractor’s project superintendent, asked how the town intends to handle their request to pull up stakes for the winter since it does not comply with the terms of the contract.
Pictured above: Spring Avenue bore pit. Photo by Bigfoot 99.
Liquidated damages are cash penalties the contractor is responsible for paying to the town for breaching a contract. The Spring Avenue project was supposed to be finished by the end of October. Halloween has come and gone, and the town has given notice to the contractor that they intend to begin collecting liquidated damages of nearly $2,000 a day written into the contract the two parties signed. Ward said Lewis & Lewis still has four weeks of work to wrap up the project.
According to the contract between Lewis & Lewis and the town of Saratoga, liquidated damages of $1,000 a day began on October 15th, when the majority of the work was supposed to be done. An extra $750 per day was added when the contractor failed to finish the entirety of the job by October 31st.
The contract signed by both parts clearly states that liquidated damages, or LD’s, will not stop because of “weather, temperatures, or other environmental conditions.”
The town has two options. The governing body can hold Lewis & Lewis to the terms of the contract and charge LD’s for the entire time the contractor is away from the job over the winter months.
Hard feelings and a ruined relationship with the contractor might be the result. Finding a contractor in the future willing to do business with the town is a risk the town will have to accept if it choose this route.
The other option is write a change order. The change in the contract would erase the penalty fees and include other requirements on the contractor. Mayor Creed James said any changes would need to specifically state what the Lewis & Lewis must do to complete the project next year.
If a change order is granted, the town will be required to maintain the incomplete project until the contractor returns. At that time, the town would present the contractor with a bill for any services done and hope they pay it.
During previous meetings, Lewis & Lewis have said, before they leave for the winter, they would like to put down temporary pavement along Spring Avenue. The contractor’s construction manager, Caleb Tygum, said, if the town chooses to uphold the contract, his team will drop everything and leave. The temporary pavement was a concession his company was willing to make. If LD’s are charged, Lewis & Lewis won’t spend any more money.
Meaning, Spring Avenue would have a dirt surface until the contractor returns next year. Mayor-Elect Chuck Davis said he was concerned about drainage when the snow melts.
Members of the Saratoga Town Council and Impact Joint Powers Board gave their opinions on how to proceed. Mayor James said Town Attorney Jane France suggested to amend the contract to stop LD’s during the winter.
Councilwoman Campbell agreed with the town attorney. She said she was concerned about alienating future contractors.
Councilman Jon Nelson disagreed. He said the contract clearly shows what needs to happen and the town should enforce it.
Councilwoman Kathy Beck said she wants to protect the town by sticking to the contract. The liquidated damages are a safety net against unforeseen problems that may crop up during the winter. She said the town shouldn’t be on the hook for those costs.
There was no consensus among town officials on how to ensure that Lewis & Lewis would uphold their end of the contract. Everyone said they wanted to protect the town, but also not ruin their relationship with the contractor. Councilman Ron Hutchins summed up the town’s predicament.
Without the threat of liquidated damages, members of the council and joint powers board worry about when Lewis & Lewis will return. They said that enforcing the contract by charging the LD’s will make sure the contractor gets back to the job as soon as possible. The change order that Mayor James proposed would need to include a specific day for when the contractor will be back. Weather is the deciding factor, so setting a date in stone is difficult. Councilman Hutchins asked Lewis & Lewis to use available data to provide the council with an idea of when they’ll start and finish the job.
The Saratoga Town Council expects the contractor to bring two proposals to the next council meeting on Tuesday, December 6th. One will detail how Lewis & Lewis will continue the job if LD’s are waived and the other will inform the town of how they intend to leave the project if LD’s are assessed. Mayor James described how he views the two options.
When the project began in June, Lewis & Lewis’s representatives were confident in their ability to finish the job by the end of October. What happened after that was clearly stated in the contract. Now that date has passed, and the contractor is asking the town for mercy. Next Tuesday’s council meeting will determine the future of the Spring Avenue waterline replacement project.
