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Home / Articles / News / Local News /  Tarred Reputation
I-40-west-NM
FNF Construction claims the state made it redo completed work and take 50 percent pay cuts.

Tarred Reputation

Construction contractor sues state for $1.28 million

February 23, 2011, 12:00 am

A lawsuit filed by an Arizona-based construction company alleges the state Department of Transportation rejected its asphalt after failing to test it properly, raising questions about the quality and longevity of the new road work.


FNF Construction, which has road construction contracts throughout the state, started rehabilitating a safety corridor on Interstate 40 in the spring of 2009 by installing a concrete barrier and smoothing out dangerous curves. In early February, FNF filed a civil complaint against DOT, claiming DOT made it replace some of the asphalt and, in other instances, left the asphalt in place but made FNF take a 50 percent pay cut for the work. 


Department of Transportation District Highway Engineer Larry Maynard, who oversees the project, tells SFR he thought the dispute was being resolved administratively. The civil complaint filed in 1st Judicial District Court in Santa Fe, however, states that all possible administrative remedies have been exhausted. The company seeks a judgment against DOT of approximately $1.28 million, plus costs and interest.


FNF’s complaint states that DOT reviewed the asphalt “subjectively” instead of conducting all the appropriate testing and, in particular, failed to test the asphalt’s concentration of one ingredient, hydrated lime. State highway-construction specifications list hydrated lime among the properties that should be tested during asphalt evaluation. Maynard confirms that DOT evaluates asphalt based partly on hydrated lime content, but couldn’t say why FNF alleged that testing wasn’t done.


Mike Robinson, the principal materials engineer for Nevada construction management firm Kleinfelder Inc., tells SFR that the practice of simply making the contractor take a pay cut on sub-standard asphalt, instead of replacing it, raises concerns about the performance and longevity of the resulting work.


“If you think about the 50 percent pay, that’s pretty arbitrary,” Robinson says. “From a contractor’s perspective, I’m only going to be paid 50 percent of what I bid it to be worth—is it only going to perform half as well as the [public] needs it to? If you take 50 percent of the pay away on what’s originally going to be a 15-year pavement, am I now going to have a 7½-year pavement?…If you have to go in there in another six or seven years, instead of 10 or 15, obviously it’s more inconvenience to the public.”


Maynard confirms that if the asphalt quality falls below a certain level, contractors have to accept corresponding price cuts. Under state highway-construction specifications, asphalt testing in a certain range below the quality standard is subject to price reductions, and asphalt falling completely outside that range is subject to removal, unless the engineer overseeing the project agrees in writing to accept it at 50 percent of the original bid price.


Asphalt that has too much binder and not enough aggregate, or rough chunks, can form slick wheel ruts in the road, or crack and retain water, causing vehicles to hydroplane, Robinson says. But Maynard says redundancy is built into the state standards, so for asphalt to fail on one or two measures doesn’t necessarily mean it isn’t safe to drive on. 


Russell Snyder, executive director of the California Asphalt Pavement Association, tells SFR that it’s very unusual for a private contractor in the construction business to sue a public entity.


“It is our experience that contractors go to great lengths to avoid lawsuits with public owners because they are costly to pursue and contractors don’t want to get on the bad side of a public agency that they will no doubt have to do business with in the future,” Snyder writes SFR in an email. “In these difficult economic times, when the bidding climate for transportation projects is very competitive, it is our experience that only the most extraordinary circumstances drive a contractor to take a public owner to court.”


Maynard says a contractor that sues DOT wouldn’t be excluded from winning project bids in the future. A call to FNF’s Arizona headquarters was not returned, and FNF Vice President Jason Sharpe at the company’s Albuquerque office says FNF “is not inclined to answer any questions.”
Maynard says he still expects construction on the job to pick up again as soon as weather permits.

 

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