10 May 2018
- By Bryan Manabat – [email protected] – Variety News Staff
GPPC Inc. has filed another lawsuit against the Commonwealth Ports Authority, this time for imposing an illegal penalty on the construction company after it had completed building a new firefighting training facility at the Francisco C. Ada/Saipan International Airport.
GPPC, through attorney Mark Hanson, sued CPA for material breach of contract, and wants CPA to be held liable to pay no less than $5 million, plus damages, interest, and court costs.
GPPC is asking the CNMI Superior Court to issue an order declaring that the construction company had substantially completed the project by May 2016 and the liquidated damages CPA imposed on GPPC were illegal.
GPPC also wants the court to state that CPA made up false reasons when it imposed liquidated damages on GPPC and that such false reasons cannot stand.
Hanson said GPPC is entitled to be paid for the project with all retention amounts due without regard to CPA’s “groundless, illegal, bad faith and fraudulent claim to contractual liquidated damages.”
In Jan. 2011, GPCC won the contract to build a new Aircraft Rescue and Firefighting or ARFF training facility and other support structures as well as the decommissioning and removal of the old Simulated Aircraft Fire Trainer or SAFT at the Saipan airport.
Contract change orders, Hanson said, modified the scope of work at various times over the life of the project since the first notice to proceed in June 2011.
Hanson said the total contract price with all change orders totaled $17,433,830, and the project took about five years to complete.
A new SAFT was successfully tested and commissioned in May 2016, he added.
The ARFF then began using the new SAFT facility for its training and certification exercises, including hosting regional training exercises with ARFF personnel from other jurisdictions, Hanson said.
The project was scheduled to be fully completed by Sept.14, 2016, including the work added by all six change orders, the lawyer added.
But just days after the last extension agreement, and despite GPPC’s substantial completion of the project, CPA notified the company in August 2016 that it would impose contractual “liquidated damages if, in CPA’s and its construction manager’s opinion, GPPC did not complete the physical turnover of the project.
According to CPA and its construction manager, the physical turnover of the project expressly included “punch list items, cleanup, and final cleanup items, inspections and final inspections.”
Hanson said just two days before the scheduled full contract completion date of Sept. 24, 2016, CPA’s construction manager made demands on GPPC for work outside the scope of the contract.
These included, among other obligations, that GPPC clean, repaint and repair commissioned work such as SAFT’s wastewater treatment facility that was completed in 2015 prior to Typhoon Soudelor, Hanson said.
He added that CPA, its construction manager and legal counsel Robert Torres “continued to posit reasons for their claim that GPPC had not fully and finally completed the project.”
CPA officially notified GPPC of its imposition of daily contractual liquidated damages in the amount of $2,500 from Sept. 24, 2016 extending indefinitely based on CPA’s opinion that GPPC had not completed the project on time which the contractor disputed, Hanson said.
On Oct. 31, 2016, Torres informed GPPC that CPA would withhold retention amounts despite being contractually obligated to release the retention amounts to GPPC.
Hanson said GPPC timely supplemented its contract dispute to include Torres’ “illegal contract decisions” on behalf of CPA.
But the CPA executive director issued a decision denying GPPC’s contract dispute. GPPC appealed the decision to the CPA board.
However, Hanson said the CPA appeals committee denied GPPC the opportunity to call witnesses at a hearing, to introduce evidence and testimony, to cross-examine CPA or to otherwise contest CPA’s evidence.
On Feb. 26, 2018, Hanson said GPPC received the appeals committee decision which affirmed the decision of CPA its construction manager and legal counsel.
Asked for comment, CPA legal counsel Robert Torres said they had not been served with the complaint yet.
In its previous lawsuit against CPA filed in Nov. 2017, GPPC alleged that the ports authority caused the company to incur $39 million in damages over the Saipan airport-runway project.
Source: Marianas Variety : http://www.mvariety.com/cnmi/cnmi-news/local/104314-gppc-files-5m-lawsuit-against-cpa