American Pipeline Construction contends decision unwarranted, with county having refused to acknowledge issues related to pandemic and a ‘Force Majeure’ situation
For months, drivers on Beneva Road heading north of the Webber Street intersection, and those traveling east on Bahia Vista Street from the Beneva intersection, have faced bottlenecks.
Orange cones have kept vehicles off the outside, northbound lane on a stretch of Beneva, resulting in blocks of backups at heavy travel times, especially for drivers whose ultimate goal is to reach the left-turn lane to head west on Bahia Vista.
On the eastern side of Bahia Vista, drivers not only have had to watch out for the pedestrians and bicyclists common in the Amish/Mennonite community of Pinecraft, but they also have had to contend with a partially closed outside line and navigate uneven pavement as they have attempted to make turns into neighborhoods or the commercial center where the Der Dutchman restaurant is located.
The county’s One Week Look Ahead reports on capital projects explained the reason for the traffic disruptions: The Bahia Vista Parallel Forcemain initiative was underway. “This project consists of a 2-mile, 24-inch transmission force main,” the reports said. The work began at the South Gate Master Pump Station and was to follow Hyde Park Street to Brookhaven Drive and then continue east to the intersection of McIntosh Road and Bahia Vista, the reports noted.
As the U.S. Environmental Protection Agency (EPA) explains, a force main is a pipeline that conveys wastewater under pressure from the discharge side of a pump or pneumatic ejector to a discharge point. Pumps or compressors located in a lift station provide the energy for wastewater conveyance in force mains.” The key elements of force mains, the EPA added, are a pipeline, valves, pressure surge control devices and a cleaning system.
The EPA also notes, “Pipeline size and wall thickness are determined by wastewater flow, operating pressure, and trench conditions.”
Just before the end of 2021, workers no longer were visible in the project areas in the vicinity of Beneva Road and Bahia Vista Street.
County Administrator Jonathan Lewis explained that situation in a Dec. 28, 2021 email to the county commissioners:
“On December 21, 2021,” he wrote, “Sarasota County formally terminated contract No. 2021-019 with American Pipeline Construction, LLC for the Bahia Vista Force Main and Resurfacing project …”
That day, he added, the county Procurement Official had also approved an emergency contract with Bob’s Barricades Inc., “in an estimated amount of $10,000,” to provide barricades in the area of Beneva Road and Bahia Vista Street.
“Capital Projects staff worked with Bob’s Barricades to ensure the barricades procured by the terminated contractor remained in place following contract termination to ensure safe conditions for the public,” Lewis continued.
On Dec. 21, 2021, Sarasota County Procurement Official Jennifer Slusarz had sent a two-paragraph letter to American Pipeline Construction in Miami. Earlier that month, she pointed out, county staff had notified the company that it was being “afforded the opportunity to remedy deficiencies” in a contract it won from the county in October 2020.
Yet, she continued, American Pipeline “had failed to complete all of the items listed [in that letter] to the County’s satisfaction. Therefore, termination of the Contract shall be effective as of December 21, 2021.”
She further pointed out that, under the terms of the contract, the county was directing American Pipeline “to remove all equipment, materials and unsuitable stockpiled spoils from the jobsite by the close of business January 7, 2022. For the safety, health and welfare of the public,” she continued, “the County requests that all erosion control and Maintenance of Traffic devices remain in place.”
In response to a Sarasota News Leader request for more information about the project status, on Jan. 2, the Capital Projects Department staff provided a statement.
“We understand the inconvenience this may cause and are working to bring in a new contractor to complete the project,” the statement said. “Once a new contractor mobilizes on site, they will temporarily pave Beneva Road and open it to alleviate traffic until the [tourist] season is over. They will also be repairing sidewalks, along with [curbs and gutters], in the vicinity of Beneva Road and Bahia Vista Street. Additional pipe installation will commence after the initial repairs are completed.”
More work will be needed on Beneva Road, the statement noted. However, that will take place after tourist season “is over,” the statement said. “At this time, we do not know when the new contractor will mobilize,” it added. Nonetheless, it said, staff would “provide additional updates within the next several weeks. Updates will be available on the County’s Projects in My Neighborhood webpage at the following link: https://ags3.scgov.net/scnp/.
The award of the contract
A county staff memo in the agenda packet for the County Commission’s regular meeting on Oct. 20, 2020 explained, “The existing Bahia Vista Street force main provides critical north-county wastewater transmission from the South Gate Master Pump Station (SGMPS) to the Bee Ridge Wastewater Reclamation Facility (BRWRF). The force main was constructed in multiple, segmented phases during 2002-2006 to accommodate increased wastewater flow from several completed areas of the Phillippi Creek Septic System Replacement Program, decommissioning of the South Gate Advanced Wastewater Treatment Plant, and planned developmental growth within the northern sanitary sewer collection basin. The force main is nearing capacity and a new force main is necessary to provide wastewater collection flexibility, transmission redundancy, and increased system capacity.
“Ancillary to the force main design,” the memo continued, “[the Public Utilities Department staff] requested the inclusion of County Fiber Optic (F/O) communication line(s) beginning at the SGMPS and along the force main route. This includes construction of F/O conduits, connection vaults and interconnection to other fiber network equipment along the force main route.” The conduits were to be constructed “in the same open cut trench as the force main where possible and horizontal directional drilled when necessary,” the memo added.
County staff was recommending that the commissioners approve a $5,967,501.50 contract with American Pipeline Construction for the installation of 11,000 linear feet of 24-inch wastewater force main and the fiber optic conduits.
The managing partner of the company, identified in the contract, is Andres Luna.
“Once construction is complete,” the staff memo added, “the affected roadways will be resurfaced as part of the project.”
County staff had advertised the Invitation for Bids for the Bahia Vista Parallel Force Main project on Feb. 26, 2020, the memo said. “Because the specifications were clearly defined,” it pointed out, the Invitation for Bid process was used to find the most responsible firm for the lowest price.
Altogether, 102 vendors viewed that solicitation, the memo noted, but only seven submitted bids. The company with the second-lowest bid was Intercounty Engineering Inc. of Pompano Beach, whose offer was $5,868,362. However, a Procurement Department document in the commission’s agenda packet showed that that firm was deemed non-responsive under the general terms and conditions for county projects.
The next lowest bid was for $6,785,758.06, from Andrew Sitework LLC of Fort Myers, the document showed.
The construction was estimated to take 425 days, the memo said. Work was expected to begin in November 2020 and to be substantially completed, “weather permitting,” in January 2022.
In a four-page letter that county Procurement Official Slusarz sent to Luna of American Pipeline Construction on Dec. 3, she reminded him that she had provided him a formal notice of intent to terminate the contract for cause.
On Nov. 23, she noted, Luna had responded with his own letter, in which he stated his disagreement with the county’s position and asked that the termination decision “be reviewed immediately,” the News Leader learned through a public records request.
Among his points, Luna contended that “the vast majority of the items [that county staff] mentioned” had been addressed previously. Slusarz countered that although many of them were addressed when they occurred, they “were subsequently neglected to the point where the same issue returned, and the deficiency was pointed out again by inspectors.”
Luna also had complained that county staff was not making “progress payments,” as called for in the contract.
Slusarz responded thus: “The Contract is clear in the deliverables required for the processing of pay applications and as of the date of the Notice of Termination letter, those deliverable requirements have not been met by American Pipeline,” so payments could not be processed.
Luna maintained that the county owed the company $626,317.58 “for work completed to date.”
In his Nov. 23, 2021 letter to Slusarz, he wrote, “The last payment made by the County was from April 2021.” The amount due to the company, he pointed out, “is a considerably large sum of money … that has impacted our ability to perform the work in accordance with the contract documents, supply sufficient skilled workers and supervision, and provide suitable materials and equipment for advancement of the project.”
To that, Slusarz replied, “The County is not in receipt of any outstanding Pay Applications for work completed and installed totaling $626,317.58.”
Luna also contended that the company had been beset by supply problems. In his Nov. 23, 2021 letter, he wrote, “During Progress Meeting No. 1 [on] February 10, 2021, American Pipeline expressed to the County the situation with the declaration of Force Majeure taking place in [the] industry as a result of a powerful winter storm that hit the resin producing plants in Texas. This event triggered a supply chain interruption that would have affected the Bahia Vista project if we had not acted in the best interest of the County by purchasing the materials for the project before the industry’s stockpile of materials was depleted. American Pipeline provided the County with extensive documentation provided by the PVC manufacturers and suppliers stating the declaration of Force Majeure and the shortages of materials. The County did not acknowledge our request nor attempt to work with us in good faith to overcome the industry’s challenges. As a result, the pipe supplier was not compensated which initiated a chain reaction of not providing payment releases required for American Pipeline to continue receiving funds to advance the project.”
(Cornell Law School’s Legal Information Institute explains that “Force Majeure” is a “provision commonly found in contracts that frees both parties from obligation if an extraordinary event [prevents] one or both parties from performing. These events must be unforeseeable and unavoidable, and not the result of the defendant’s actions, hence they are considered ‘an act of god.’” For example, the Institute adds, a natural disaster such as a “major earthquake, flood or hurricane,” if they were not predicted, would be considered Force Majeure.)
Slusarz advised Luna, “The [February 2021 progress] meeting minutes do not reflect these statements having been made or discussed.” She added that the issue “was the inability of American Pipeline to properly install the pipe in a timely manner and in accordance with the contract specifications and/or manufacturer recommendations.”
Further, Slusarz noted, “By May 12, 2021 most, if not all, pipe had been delivered to the project site.”
Luna countered in his Nov. 23, 2021 letter, “Although, the material was ‘onsite,’ it was not secured since payment toward the material had not been issued. As such, the [Force] Majeure clause by definition was in full effect.”
Since the first progress meeting,” Luna reiterated his earlier point, “American Pipeline stated that the County needed to amend its contract specifications so that it could address the ramifications of the global pandemic and the scarcity of project materials from a Force Majeure. If the concerns raised had been timely addressed, we would have been able to pivot in a collaborative manner, making all the necessary adjustments to man the project adequately.”
In her Dec. 3, 2021 letter, Slusarz told Luna that the minutes of a Sept. 27, 2021 meeting with representatives of American Pipeline reflected the following: “‘It was agreed that COVID related time extension should be shown with justification with the construction schedule and that further discussion would also need to take place.’” Slusarz added, “No construction schedule was ever provided showing the impacts required for a discussion of a contract time extension.”
Luna also pointed out in his Nov. 23 letter, “American Pipeline has successfully completed a vast number of projects with the similar characteristics including utility and roadway reconstruction. To prove we are more than capable of completing this scope of work, we provided all qualifications and references during the time of bid, which was reviewed and accepted by the County. American Pipeline’s perfect history of outstanding performance records underscores the correlation of the extraordinary events this past year affecting performance,” Luna continued. “We believe this Notice of Intent to Terminate has been wrongfully extended and request that this decision be reviewed immediately.”