(May 12) More than a year after the San Bernardino County Board of Supervisors gave direction to county counsel to file a lawsuit against the architectural and engineering firms county officials deem responsible for a major portion of the $29 million construction cost overruns on the county’s Adelanto Detention Center, the county made good on that threat.
On May 1, the county, represented by the law firm of Allen Matkins Leck Gamble, filed suit against the architectural firm of Hellmuth, Obata & Kassabaum, Incorporated, based in Culver City, and Los Angeles-based Jacobs Engineering, alleging breach of contract and negligence.
The board on April 22, 2014 had authorized legal action against the two firms, but more than a year had elapsed without the filing of a suit. It was recently revealed that the county had provided Allen Matkins Leck Gamble with a retainer of $700,000 to pursue the case against Hellmuth, Obata & Kassabaum and Jacobs. The actual filing of a suit was held in abeyance while Allen Matkins Leck Gamble and county representatives sought to negotiate with the two firms a settlement short of litigation that would be acceptable to the board of supervisors. After burning through $182,000 of that retainer, Allen Matkins Leck Gamble was making what was deemed insufficient progress toward having Hellmuth, Obata & Kassabaum and Jacobs acknowledge any responsibility for the overruns. The final cost overrun on the project attributable to either Hellmuth, Obata & Kassabaum and Jacobs occurred in March 2014. Any legal action by the county against those firms would need to be pursued within two years of the recording of that overrun. The county elected late last month to initiate the lawsuit at this time to increase its leverage in seeking to forge a settlement.
The lawsuit has the potential of costing the county well over a million dollars to litigate if the matter actually goes to trial. There is a prospect that the county could recover those legal costs, but only if it prevails at trial. If the county loses the suit, it would be on the hook not only for the fees to be paid to Allen Matkins Leck Gamble but also, potentially, for the attorney fees paid by Hellmuth, Obata & Kassabaum and Jacobs to their attorneys.
The construction bill on the project was originally slated at $90,951,937, but after a total of 29 change orders and contract amendments, the price zoomed to $120,419,790.
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 projected to be the project’s overall price including a ten percent cost overrun contingency when it was approved in 2010.
The facility, located on 9438 Commerce Way in Adelanto, was formerly privately owned and run as a 706-inmate capacity institution known as Maranatha Prison. It was sold by its owner, the Moreland Family Trust, to the county in April 2005 for $31.2 million. The expansion added 1,392 new beds to the existing capacity of the jail.
Hellmuth, Obata & Kassabaum, Incorporated was originally given a $4,466,000 contract to provide architectural service on the project. Nine amendments later, Hellmuth, Obata & Kassabaum’s contract reached $10,438,396, an increase of $5,972,396.
When the lawsuit was authorized nearly 13 months ago, it was stated that both Hellmuth, Obata & Kassabaum and Jacobs were the parties responsible for design flaws that resulted in inadequacies with the fire sprinkler and smoke detection and evacuation systems that entailed millions of dollars in additional construction costs, all of which were paid to Bellevue, Washington-based Lydig Construction, the general contractor on the project.
In December 2010 the county awarded a $90,951,937 contract to Lydig Construction as the low bidder, after making a finding the bids received from S.J. Amorosa Construction Co., Inc. of Costa Mesa and Flintco of Folsom to be non-responsive.
Among the contract amendments that followed were the fifth one approved by the board of supervisors on February 23, 2013, in order to accommodate state fire marshal-mandated changes to the smoke control evacuation and automatic fire sprinkler systems, an increase in number and size the heating ventilation and air conditioning structural roof supports as well as to make further modifications mandated by the state fire marshal and various other agencies. That amendment provided Lydig with a $2,472,388 enhancement to the contract.
On May 21, 2013 the county made a sixth amendment to Lydig’s contract, this time relating to labor and materials for the revision of the smoke control systems and fire protection systems, to, in the exact words of county director of architecture and engineering Carl Alban, “convert the specified fire smoke dampers to smoke dampers as part of the revisions to the smoke control system” in the amount of $5,063,392.
On June 25, 2013, the board of supervisors approved an eighth amendment to the contract in the amount of $6,004,736 to cover labor, materials, labor impacts and acceleration costs related to the revision of the smoke control systems and fire protection systems, a portion of the cost of which was covered with Amendment No. 6.
On August 6, 2013, the board approved an eleventh amendment, providing Lydig with $709,533 for the installation of a third electrical service necessary to increase the available power for providing capacity for future upgrades of the facility; the installation of a fire booster pump to ensure the proper flow and functioning of the fire protection systems; the expedited procurement and delivery of smoke control panels and supervisory panels necessary to achieve the scheduled project completion date; and the relocation of smoke detectors in the dormitory sleeping areas as required by the Board of State and Community Corrections.
On November 11, 2013 the board approved a twelfth amendment to the contract for $415,952 to add twenty-seven dampers to the smoke evacuation ductwork, modify the glazing stops at master control, install fire wrap to ducts and dampers at specified locations and separate the dry zones at the housing units.
On December 17, 2013 the board of supervisors approved a thirteenth amendment in the amount of $304,450 for modifications to the electrical service yard, fire sprinkler system isolation in the support building and constructing foundation and adding position indication valve and monitoring devices for the fire booster pump, relocating fire/smoke dampers, revising exhaust duct risers in the center core of the housing units and adding a control module to the master control fire shutter.
On March 25, 2014, the board of supervisors approved the fourteenth change order on the project, one for $336,682 to cover the cost of correcting overcurrent issues, improvements to water facility operations, balancing of the smoke control system, perform load bank testing of the generators and to carry out various corrective work.
Suggestions during the more than two years while costs on the project were escalating pertained to kickbacks involving county officials and not Hellmuth, Obata & Kassabaum or Jacobs but rather the Washington State-based general contractor on the project, as it was the primary beneficiary of the cost overruns. The county has not authorized any action against Lydig and has not made any public reproval of county architectural and engineering division employees who recommended passage of the contract amendments and change orders which created the cost overruns.
Rather, the lawsuit suggests that Lydig played a leading role in revealing the flaws contained in Hellmuth, Obata & Kassabaum or Jacobs’ design specifications.
“The county is informed and believes that Lydig internally began to raise questions with Hellmuth, Obata & Kassabaum and Jacobs about the sufficiency of their design of smoke control systems in January of 2011,” according to the lawsuit. “Ultimately, it took nearly two years for Hellmuth, Obata & Kassabaum and Jacobs to rectify all of the defects in their designs.”
Though the project took nearly three years to complete, the county was rushing things as it needed to complete the expansion by January 31, 2014 or face losing $100 million in state funding. This impatience on the county’s part, which led to Alban and other county officials prompting the board of supervisors to approve the hodge-podge, stopgap and improvisational change orders, represents a weakness in the case the county must pursue against Hellmuth, Obata & Kassabaum and Jacobs. In recommending approval of many of the change orders and contract amendments, Alban cited requirements mandated by third parties such as the state fire marshal. Indeed, the county declared the detention center as operational to meet the state deadline, prior to the completion of work on the facility.
The state of California is to cover $100 million of the project cost based upon the board of supervisors’ submittal in March 2008 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 the detention facility.
It was suggested that the filing of the suit was a ploy to bring Hellmuth, Obata & Kassabaum and Jacobs to the negotiating table. This was reinforced by the consideration that neither party is due in court for nearly five-and-a-half months, on October 28, when a trial setting conference is scheduled.