By Dan Christensen, FloridaBulldog.org
Two weeks before Broward County fired off a New Year’s Eve letter to contractor Tutor Perini demanding $34 million in damages for costly airport construction delays, Broward airport boss Kent George tried to secretly negotiate a nearly opposite deal with the company.
On Dec. 16, following weeks of meetings, George proposed that the county pay Tutor Perini nearly $21 million to settle the dispute over who was responsible for the lengthy delays, according to email obtained by FloridaBulldog.org.
Tutor Perini chief executive Jack Frost declined the offer as inadequate in a response emailed to George and seven other county and company officials two days later.
“As you are aware I have made a good faith proposal in the neighborhood of $25M +/- settlement (agreed to twice by your designated staff in the negotiations),” said Frost, noting that litigation may be necessary to resolve a dispute that George had also warned could deteriorate without a deal.
The roughly $4 million difference between the two sides wasn’t the deal breaker. Instead, the main sticking point appears to have been George’s insistence that as part of the deal Tutor Perini Fort Lauderdale Hollywood Venture (TPFLHV) agree to pay the airport about $11 million in liquidated damages for contractual delays.
The payment of such penalties, however, would be tantamount to an admission by Tutor Perini that it was responsible for many delays. The company instead contends in documents filed with the county that the delays were caused by poor administration and dozens of county–sought changes to the contract.
“It is my understanding that under Florida law, BCAD (Broward County Aviation Department) cannot enforce its liquidated damages provision for delays occasioned by BCAD’s own ‘active interference.’ It is indisputable that BCAD unilaterally directed TPFLHV to perform extra and changed work after the contract completion date,” said Frost’s email reply.
The contract completion date was nearly two years ago, Feb. 22, 2014. A significant amount of construction and administrative work continues amid growing rancor between the county and its contractor.
California-based Tutor Perini, with venture partner Ohio’s Baker Concrete Construction, is the prime consultant for the tunnel structures that carry Fort Lauderdale-Hollywood International Airport’s new expanded runway and parallel taxiway over U.S. 1, the Florida East Coast railroad tracks and East Perimeter Road. The venture also was responsible for other related construction, including the new southbound airport exit ramp to U.S. 1.
The original contract award for design-build services was $180 million. Various approved change orders, including one for $6.2 million executed just before Christmas, have raised the contract’s cost to $226.2 million, according to documents obtained by FloridaBulldog.org.
SETTLEMENT DISCUSSIONS ‘ONGOING’
Broward Aviation Director George did not respond when asked via email why he offered to pay the company millions of county dollars when the county insists that TPFLHV caused the delays. Aviation department spokesman Gregory Meyer said, “These were settlement discussions, which are ongoing, so I cannot discuss it or elaborate.”
Frost did not respond to a request for comment.
In an interview, Broward Commissioner Lois Wexler said she was unaware of George’s settlement offer.
“We were not in the mix on this, it goes deep in the bowels of the organization,” said Wexler. “It does suggest the county is responsible for the delays…and if (Tutor Perini) has what they say they have in writing it’s certainly incriminating.”
Nevertheless, George seemed confident in his email to Frost that he could quickly sell the deal to the full Board of County Commissioners.
“Upon acceptance by you,’’ the Broward airport director wrote, “I will proceed as indicated below, with issuance of checks. (Hopefully, prior to the end of this year.)”
At the same time, George had a double-barreled warning for Frost. Should Tutor Perini reject the settlement offer, Broward County would come after it to collect its $34 million claim for damages and withhold payment on $22 million in disputed charges.
“BCAD reserves the rights, under the contract and county ordinances, including the False Claims Ordinance, to pursue other claims and remedies not listed above,” George said.
Frost, in rejecting the deal, noted that Tutor Perini has pending several big money claims set to be heard by a non-binding Dispute Avoidance Panel in February and March. Those claims, which include allegations that the county has improperly withheld payment for work and provided deficient design criteria at the outset, total $77.5 million.
“I believe the outcome of the above noted DAP hearings and subsequent litigation, if necessary, will prove a far higher amount due TPFLHV,” Frost told George. “I again ask you to reconsider your position.”