(December 16)  The county of San Bernardino this week increased by $450,000 its existing $250,000 contract with the law firm handling its lawsuit against the engineering firm it deems responsible for design flaws and excessive cost overruns on the smoke ventilation system at the High Desert Detention Center Project.
The county of San Bernardino experienced substantial cost overruns on the Adelanto Detention Center Project, which originally was a 706-inmate capacity facility owned and run by Maranatha Private Corrections, a part of the Moreland Family Trust. The Moreland Family Trust in April 2005 sold the prison, located on 9438 Commerce Way in Adelanto, to the county of San Bernardino for $31.2 million. The county initially envisioned shouldering the lion’s share of the cost of adding 1,392 new beds to the holding facility, but in March 2008 the board of supervisors approved the submittal of a proposal to the State Correction Standards Authority requesting available funding of up to $100,000,000 to cover 75 percent of the cost to construct 1,368 additional jail beds at what was then dubbed the Adelanto Detention Center. In May 2008, the county was conditionally awarded the requested $100 million for the expansion, and was ranked first on the list of public entities to be conditionally awarded funds available under a state detention facility financing law, AB900. In July 2010, the board gave conceptual approval to the project and established the various obligations of the county, California Public Works Board, and the California Department of Corrections and Rehabilitation as to the project’s general terms and termination, cost, cost sharing, scope, schedule, bidding and construction, post project completion and records retention for the project.
Initially, the total cost of the project was pegged at $120 million, which included a ten percent cost increase contingency, and the construction bill on the project was originally slated at $90,951,937 when it was approved in 2010.
Throughout the nearly four-year construction of the project there were continual change orders and amendments to the project, all of which benefitted the project contractor, Bellevue-Washington-based Lydig Construction. By 2012 there were recurrent rumors and reports of kickbacks relating to the project. Upon the completion of the project in March of this year, there had been a total of $20,657,043 worth of amendments to the project contract and $8,810,810 worth of change orders, totaling $29,467,853 in cost overruns on the construction portion of the project.  Moreover, the total price tag on the project, including engineering, architectural, licensing and inspection costs, reached $145,451,910, which was $25.45 million more than the $120 million not-to-exceed price tag for the undertaking.
A major portion of the cost overruns pertained to changes to the prison’s fire control, fire alarm, fire suppression and smoke ventilation systems.
After a period of review of the matter by the county’s architecture & engineering division in conjunction with county counsel, county officials concluded that the cost overruns were largely a consequence of design  deficiencies by the project’s architect of record, Hellmuth, Obata + Kassabaum, Inc. and the engineer of record, Jacobs Engineering Group Inc.  A decision to sue both entities was made on the basis of that conclusion. Following a competitive solicitation, the county selected the law firm of Allen Matkins Leck Gamble Mallory & Natsis LLP to advise and assist county counsel in the legal matters concerning the construction cost overruns on the project and concerns regarding the design of the smoke control system and other design failings. Allen Matkins Leck Gamble Mallory & Natsis firm was selected to provide these legal services because of its expertise in construction litigation and familiarity with some of the parties involved in the construction of the project. On April 22, 2014, the board of supervisors authorized county counsel to initiate litigation against Hellmuth, Obata + Kassabaum and Jacobs for breach of contract and other issues related to the project.
This week, the board of supervisors practically tripled down on its initial retainer of Allen Matkins Leck Gamble Mallory & Natsis, approving a $450,000 increase in the not-to-exceed amount of the contract, to a total of $700,000.
According to county counsel Jean-René Basle, the change in the contract amount is now required due to additional costs anticipated as litigation against Hellmuth, Obata + Kassabaum and Jacobs proceeds.
Jacobs Engineering, a once highly respected firm, has not fared well of late in court when the competence of its work has been challenged.
The city of Victorville sued Jacobs Engineering, which was doing work under the name of Carter & Burgess Engineering, on an electrical co-generation plant the city had obtained permits for and was seeking to construct. The project never came to fruition, entailing losses on the purchase and scheduled purchase of equipment. The suit was settled through a $54 million pay out to the city.