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Injunction Stops Contractor Replacement

Monday, April 11, 2016

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A Washington judge has ordered an injunction in an ongoing dispute involving the planned $1.4 billion expansion of the Washington State Convention Center.

After being terminated from the project in March, the joint venture Skanska-Hunt sought an injunction to stop convention center officials from hiring a replacement builder. The contractor contended that the convention center officials violated the parties’ contract and said the firing was without cause.

Court’s Ruling

King County Superior Court Judge Beth Andrus ruled Wednesday (April 6) that the Washington State Convention Center had a right to terminate the preconstruction services agreement with Skanska-Hunt serving as general contractor and construction manager-at-risk.

Seattle
© iStock.com / joecho-16

The convention center must either retain Skanska-Hunt or use a traditional procuremant process for a replacement, selecting the lowest cost option, a court has ruled.

However, if the WSCC wants to hire a replacement contractor, it must use the traditional design, bid and build process which requires selecting the lowest cost option, according to Capitol Hill Times, citing the court ruling. If WSCC wants to remain with the previous GC/CM method then it must retain Skanska-Hunt and begin negotiating a maximum allowable construction costs (MACC) for the project, the report says.

“By electing, under RCW 39.10.360(6), to enter into a contract with Skanska-Hunt and to accept what are essentially GC/CM preconstruction services from Skanska-Hunt,” Andrus wrote in her decision, “Skanska-Hunt’s right to be the firm with whom WSCC negotiated for a MACC contract for this Project became a vested right. As a result, WSCC has no statutory right to declare a ‘do over,’ to seek a new GC/CM.”

Meanwhile, the dispute will go to trial at some point over the next four months, leaving the massive expansion project in limbo.

Both Sides: Pleased

Both sides appear to be pleased with the ruling.

“We are obviously very pleased with this decision, and citizens of Washington State should be, as well,” Skanska-Hunt said in a statement. “By maintaining the status quo, preventing WSCC from reissuing a call for new GC/CM proposals, [the] decision best protects our vested rights as the properly selected GC/CM and helps preserve the integrity of the public procurement process.”

Matt Griffin, a partner with the project’s development manager Pine Street Group, said the WSCC team was also pleased with the decision.

“However, we need to read the judge’s determination carefully and decide on our next steps,” he reportedly told Capitol Hill Times. “Our goal remains to work toward the best outcomes for the Washington State Convention Center (WSCC).”

Skanska-Hunt is required to pay an injunction bond of $1 million.

The Washington State Convention Center Public Facilities District had initially selected Skanska USA and Hunt Construction Group in June 2015 to build the addition. The Puget Sound Business Journal reported the partnership had beat out two other finalist joint ventures made up of Mortenson and PCL, and Lease Crutcher Lewis and Clark Construction Group at the time. When it made the initial decision, the convention center used a process that selected a general contractor based on a variety of qualifications, not just the lowest bid, according to the Seattle Times.

'Not the Right Fit'

However, in mid-March, center officials decided to terminate their relationship with the builders, noting that the Skanska-Hunt partnership was “not the right fit for this project,” according to Curbed.

At the time of termination Griffin said the project schedule would not be “materially affected by the change” and that a new contractor selection process would begin again. At that time, officials also said they would honor all existing subcontractor agreements and retain firms already under contract for the project.

According to Capitol Hill Times, Griffin told the court that Skanska-Hunt had extended the agreed upon construction schedule by more than six months and provided a construction estimate exceeding the approved budget, in the months prior to the termination.

‘Disappointing’ Decision

Skanska-Hunt initially responded to the termination with disappointment, saying the decision was “shocking and tremendously disappointing.”

"We have operated in a professional manner consistent with our corporate values and in the best interest of the Washington State Taxpayers who will ultimately fund this $1.4B project," the firm said in a statement provided to multiple media outlets.

"The services, which we have provided WSCC, are consistent with the manner in which we have delivered similar projects for the cities of San Francisco, Phoenix, San Antonio, San Jose, Seattle and others over the past decade."

The Project

Designed by LMN Architects, the expansion project will essentially double the current convention center, adding around 250,000 square feet of exhibit space, 120,000 square feet of meeting room space and a ballroom, reports relate.

Current facilities opened in 1988 and are being expanded in order to host larger national conventions, according to officials. Construction on the expansion is set to begin in 2017 and finish in 2020.

   

Tagged categories: Business matters; Commercial Construction; Contractors; Lawsuits; Partnerships; Project Management; Renovation

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