Flintco Pacific, the contractor blamed by Palo Alto officials for the long-delayed and error-plagued construction of the Mitchell Park Library and Community Center, is firing back at the city and accusing officials of fraud and breach of contract.
In a scathing letter, Flintco's attorney, Arthur Woodward of the firm Downey Brand LLP, accused the city of "a pattern of wrongful conduct" in its dealing with Flintco, a firm that was hired in 2010 to build the new library and fired in January after the project fell about two years behind schedule. The letter alleges that the city "misrepresented the accuracy and completeness" of the plans and specifications for the new facility when it went out to bid for the project.
The letter is the latest skirmish in what promises to be a protracted legal tug-of-war between Palo Alto and Flintco, which began work on the new library in September 2010. In firing Flintco, City Manager James Keene cited the company's "historically poor performance and failure to make adequate progress toward completion." Despite repeated requests from Palo Alto for a greater workforce and a more detailed plan for completing the work, the project continued to languish over the past two years.
After firing Flintco, the city hired Big D Pacific Builders to finish the south Palo Alto facility, which is now expected to be completed at the end of this year. Flintco and the city have since each filed legal claims against each other.
According to the city, much of Flintco's work on the new library was botched or incomplete. In a letter to company president Tom Maxwell, Keene wrote that the work was "deficient in numerous respects." These included including the "failure to consider the coordination of trades" and the "failure to take into account significant contract requirements for completion."
At the time of the firing, there were about 2,000 items on the worklist for the library project, which was funded by a $76 million bond that voters approved in 2008.
The July 9 letter from Woodward argues that the delays and cost overruns stemmed from deficient designs and the city's "repeated material breaches of the terms of the contract."
"Flintco expects the evidence will show that the city's actions were intended to shift the blame for project cost overruns and delays to Flintco while covering up the fact that the plans and specifications were incomplete and inaccurate," the letter states. "The city's termination of Flintco was patently wrongful and improper. The city continued to breach the contract after it terminated Flintco."
In its "breach of contract" claim, Flintco argues that the city knew the plans for the library were "plagued with errors, omissions, conflicts, ambiguities, lack of coordination and noncompliance with applicable code requirements." This led the city to make many changes to the contract. The changes were "so frequent and the magnitude of their scope so broad that eventually almost every portion of the project was impacted in some way."
The company claims that in many cases the city failed to respond to its change-order requests or denied these requests, denials that the company called "wrongful, arbitrary and capricious."
The company is also alleging that the city "perpetuated an internal and public narrative that placed the blame for all of the added costs and delays on Flintco and Flintco's subcontractors," even though the true basis for these setbacks were deficient plans and specifications.
"The city's conduct interfered with and hindered Flintco's progress and its good faith efforts to complete the project in a timely and workmanlike manner," Woodward wrote. "Its wrongful conduct resulted in lost productivity, which, in turn, had a significant cumulative impact on the project schedule and project costs."
The company also argues that "the city fraudulently induced bidders to submit bids by deliberately setting out for bid plans and specifications which it knew, or should have known, were incomplete and inaccurate."
Flintco claims the city hid the "true state of the bid set of plans and specifications" and continued its "cover up" after Flintco began to coordinate its subcontractors and proceeded with construction.
"The city's cover ups continued through and after the termination of Flintco in press releases designed to perpetuate the cover up and conceal the true reasons for the Project and cost increases," the letter states. "Flintco became a scapegoat."
The letter claims that Flintco is entitled to be compensated for the "increased cost and time it incurred, and lost profits it suffered, as a result of the city's premature and improper release of incomplete plans and specifications." Because the company does not have all the pertinent information at this time, it has not included in its claim the amount it feels it's owed, only saying that it is "in the millions of dollars."
According to John Stump, vice president of Flintco, the company will file a writ next week asking the courts to force the city to share its public records.
City Attorney Molly Stump could not be reached for comment Thursday.