April 8, 2016

Judge orders a trial in WSCC contractor dispute

A King County Superior Court judge said the Washington State Convention Center is not required to immediately reinstate Skanska-Hunt as its general contractor/construction manager for the $1.4 billion convention center expansion, but is barred from restarting the search for a new GC/CM.

In a ruling Wednesday, Judge Beth Andrus determined that the disagreement between WSCC and its contractor, a joint venture between Skanska and Hunt Construction Group, has many disputed facts that would best be resolved by a trial.

The decision said that the trial will occur within 120 days.

In March, the WSCC said it would take advantage of a clause in its preconstruction contract and terminate Skanska-Hunt. Matt Griffin of Pine Street Group, the development manager for the expansion, said at the time that Skanska-Hunt wasn't the right fit for the project.

Skanska-Hunt argued it was terminated because WSCC wanted to find a less expensive GC/CM.

According to court documents, while Skanska-Hunt was doing preconstruction services, WSCC talked to two losing finalists about construction costs and whether they would be interested in the project if it was rebid.

If WSCC wants a new contractor, Andrus ruled it must use the traditional design-bid-build model, which requires the owner to select the lowest responsible bidder without negotiation. The judge said WSCC can't hire a new GC/CM.

Skanska-Hunt issued a statement saying it was pleased with the ruling because it protects the contractor's “vested” rights and “helps preserve the integrity of the public procurement process.”

Pine Street Group issued a statement saying it was pleased that the judge “upheld our decision to terminate” Skanska-Hunt's contract but will study the ruling before taking any further action.

Tymon Berger, a partner at Ashbaugh Beal who was a contractor for 10 years and now specializes in construction litigation, said Pine Street could appeal the judge's order.

Berger said the law allows public organizations to terminate bids and projects when they deem it necessary, so it is not clear to him why the judge would say WSCC can't seek a new GC/CM.

“(The law is) designed to allow public officials to make a discretionary call that they don't want to spend money in a certain way, so they can decide to pull the plug on a project,” he said.

Berger said the judge may have decided that Skanska-Hunt's preconstruction work has moved the project far enough along that it no longer qualifies for using a GC/CM.

GC/CM contracts are more complicated than traditional design-bid-build contracts. The owner selects the firm based on qualifications and experience, not just price.

The GC/CM method is used on large, complex public projects, and the winning firm is often brought in early in the process to give input on design.

Berger said the ruling could be good news for contractors. The judge's decision could give contractors greater protection from bids being manipulated to drive down costs, Berger said.

This is one of the first times Berger said he has seen a decision that could limit a public entity's control over bidding and contracting.