Politics & Government

Company That Built Wastewater Plant Says It's Still Owed $13.8 Million

Claims allege that project riddled with change orders, delays and maladministration that increased cost of project

The company that built Petaluma’s wastewater plant says it’s still owed $13.8 million for the project, the result of hundreds of change orders, delays, disruptions and “maladministration” by the engineering firm that carried out the work.

Kiewit, a construction company with headquarters in Omaha, Neb., has filed a series of claims with the city starting last fall alleging that despite being paid $115 million for the facility, which opened in 2009, it lost money on the project.

“While a construction company as experienced as Kiewit has overcome such design-related obstacles in the past, the volume of changes and the combative nature of the city’s construction manager, The Covello Group, made success all but impossible,” Kiewit wrote in a claim submitted in October 2010.

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According to documents, the Covello Group issued more than 500 change orders, which slowed the project and incurred additional costs. At one point, the project was extended by another 67 days, for which Kiewit said was never compensated.

Another issue arose when a portion of the headworks structure had to be redesigned, forcing a portion of the project to be put on hold. Kiewit claims it would be more than a week until the city provided guidance on the problem, causing lost time.

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Petaluma City Attorney Eric Danly clarified that the claims are not a lawsuit and that the city has met numerous times with representatives of both Kiewit and Covello Group to address the charges. On August 8, the parties will meet with a mediator who specializes in public works projects to determine whether additional compensation is required, Danly said.

“We really want to determine whether there are meritorious claims,” Danly said. “Public officials are fiduciaries for the public’s money, so…while we want to ensure that the contractor is paid what they are due, we don’t want to incur additional public expense by litigating over compensation they should receive.”

The original cost of the much-touted wastewater plant was $110 million, but the city paid an additional $5 million for additional work required by change orders and lost days due to bad weather.

Repeated calls to the Covello Group last week and on Monday were not answered.


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