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$9M Suit Targets Contractor, Coating

Monday, June 27, 2011

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Improper coatings application and other problems are at the heart of a $9 million dispute over a ruptured water pipeline in Naples, FL.

Contractor John Reynolds & Sons Inc., of Fairburn, GA, is accused of not following project specifications in the project, leading to the February 2010 rupture of the buried pipeline that delivered raw water to a Collier County water plant.

 South County Regional Water Treatment Plant

 Hazen & Sawyer

Built in 1984, the South County Regional Water Treatment Plant has undergone several expansions and now has a reverse osmosis water treatment capacity of 20 million gallons of drinking water per day.

“We were operating the plant, and suddenly things started shutting down,” county Water Director Paul Mattausch told the Naples Daily News.

The multimillion-dollar question: Who’s to blame?

$47M Contract

Collier County awarded Reynolds a $47,038,450 contract in 2006 for construction of the South County Regional Water Treatment Plant Wellfield Expansion Project, court records show. The contract stipulated a “Substantial Completion” date of July 2, 2008, and a “Final Completion” date of Nov. 8, 2008.

The contract included a provision for liquidated damages of $9,857.12 a day for each day past the “Substantial Completion” deadline.

On July 1, 2008, court records show, the county extended the “Substantial Completion” date to Sept. 30. The change was made apparently at the contractor’s request, “to address motor replacement issues,” according to a letter from the county to the contractor. (The letter did not detail the problem.)  The Final Completion deadline remained the same.

Noncompliance Alleged

Now, in a suit filed in Collier County Circuit Court, the county says Reynolds failed to comply with a variety of elements of the project’s plans and specs, including:

• Improper application of coatings;

• Failure to install polywrap;

• Improper embedding of the pipe and failure to de-water the trench during construction;

• Installing air release valves of the incorrect size, type and location (and installing them properly); and

• Installation of improper bolts.

The county’s lawsuit alleges that workers laid the 30-inch PVC pipe on top of rock. An investigation showed that rock gouged the pipe, causing it to rupture less than a year after it was put into service.

Seconds after the rupture, air trapped in the pipeline ripped 750 feet of the pipe apart, the Daily News said.

The air had been trapped in the pipeline because the air valves, proposed by the contractor and approved by the project engineer, weren’t right for the job and their installation didn’t follow the manufacturer’s recommendations, according to a forensic evaluation, the newspaper reported.

The county is seeking to recover $9 million in damages; the suit itself could cost between $300,000 and $400,000, lawyers have told the county.

County Countersued

The contractor tells a different story. In a countersuit, the company says the project deadline was pushed back from July 30, 2008, to Sept. 30, 2008, due to circumstances including unexplained “issues relating to the design of the Project.”

The contractor, “to its detriment,” accepted the delay, relying on the county’s representations in changing its work schedule, using and paying subcontractors and vendors, the suit says.

The contractor remained on the project without seeking additional compensation for the changes or the delay, and then was not paid for its work, the suit says.

Coatings Specified, Contractor Says

The contractor also says it followed specifications for coatings inside the pipe fittings.

The contractor says the county is trying to collect damages based on the original substantial completion date.

In the end, the contractor alleges, the county improperly withheld $776,000 and assessed liquidated damages when Reynolds didn’t meet the project’s original “substantial completion” date of July 2008.

The company attributes the rupture to a “large pressure spike when the water plant shut down or lost power,” the Daily News reported. The county denies the allegation.

Actions Combined

The two lawsuits have been combined into one case, with motions heating up on both sides.

According to the Daily News, the county has objected to a request that Malcolm Pirnie, the company that conducted the forensic evaluation, turn over correspondence and records of conversations with the county, along with other documents.

Nor has the contractor complied with the county’s requests for documents, citing confusion over the county’s use of capital letters when referring to “Project Specifications,” the newspaper said.


Tagged categories: Contractors; Contracts; Lawsuits

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