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.
> 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.
What does this mean? Aren’t public records, by definition, public? Or is the City holding out on Flintco?
well, palo alto just isn’t what it once was. this man can get steamed about it all. just go ahead and have the newer library. quit crying and finish the project, please
Does this mean, among other things, that the city rushed forward too fast with its plans, or does this mean Flintco is just doing a massive cya here? Maybe some of both?
Time to clean up and clean out Palo Alto City Hall! For years there has been a parade of scandals, ethical lapses, incompetence, arrogance, lack of transparency. New leadership is badly needed from the City Council level down to the department heads. Start with the Director of Public Works!
to Memories –
>Does this mean, among other things, that the city rushed forward too fast with its plans, or does this mean Flintco is just doing a massive cya here? >Maybe some of both?
It only means that the opening volleys have been fired in the first battle. Prima facia, Flintco looks like they have a lot to answer for. Doubtless Flintco’s lawyers have already found enough that they think they can mitigate whatever damage results, both monetarily and to their reputation.
One question in my mind stems from James Keene’s comment about the company’s “historically poor performance and failure to make adequate progress toward completion.” If they had “historically poor performance”, why in the world were they granted the contract in the first place? If Palo Alto had reason to suspect “poor performance”, why wasn’t there better monitoring in place to catch it in a more timely way?
There is doubtless enough egg to go on all the faces in the room.
Who is responsible for the “plans and specifications”?
The city? the architects?
No problem. Lets hire the same people to manage remodeling the City Hall lobby!
After we paid $21M to a bankrupt Enron, suing this city for $ looks too easy!
> “historically poor performance and failure to make adequate
> progress toward completion.”
The City Manager probably means performance on this project. The City is supposed to have done due diligence on the contractors responding to its RFP for this project. If the City picked this contractor based on their historical performance, in part–then one can only wonder what happened here in Palo Alto?
I don’t think we can take the statements by Flintco’s attorneys as the unvarnished truth. Having been involved in construction lawsuits in my line of work, I have had first-hand experience with the kind of whoppers that plaintiffs who hope to cash in routinely include in their legal paperwork. Yes, the construction of the Mitchell Park Library has been a sad fiasco. But I don’t think we should pile on the city for all of it.
> But I don’t think we should pile on the city for all of it.
Why not?
If Flintco has not had this problem with its other clients, why do you think they chose to not conduct themselves in a professional way here in Palo Alto?
By the way–did you approve of how the City Manager conducted the stealth meetings with the Arrillaga people? Show we pile on the City for that, or give them a pass also?
This city is becoming ridiculous and the managers want to screw it up more so they can travel to more conferences to promote their “zero-whatever” initiatives.
So any news on when the new contractor will finish the library?
And how’s that 9 — NINE — year study of traffic light timing near Paly and Town & Country coming? Has it dawned on our genius planners that kids aren’t in school during summer vacation so the light timing just maybe could be adjusted to reflect reality?
We can see the City is incompetent in it’s plannings just from the Libraries.
We have 2 out of 3 Libraries in our town our of commission … for years … and years. Why did the city start in on the Newell Library when they knew the Mitchell Park Library was not going to be done?
I do, at least partially blame the city, you cannot look at what has been done in Palo Alto and think our city planners know what they are doing or have any ability to manage or even find people who can manage.
$76 million! I can scarcely believe it. On the other hand it was FlintCo’s job, their responsibility, they need to get the job done. I wonder if they just have more profitable uses for their people than to bother with the Palo Alto Library, and it was after all a hard job, so they just threw it?
Massive disinvestment in so many aspects of our country has led to many things needing to get done and a shortage – read big profits to be made, lack of people to do them, while at the same time we have big unemployment, inflation, a sagging economy and a people without vision or leadership. No, the invisible hand of the market does not work by itself or without control or sanity checks despite the number of constant claims that it does or insults to people who see through those claims.
Five Questions With Flintco:
http://www.tulsaworld.com/business/5questions/five-questions-with-dave-kollmann-of-flintco/article_bd9bd297-3233-5f40-a6fa-42e1813448eb.html
The article lists some of Flintco’s current projects.
A family member (who I have great respect for) has worked for Flintco for about 6 years. He is a Project Manager and has been involved in projects across the country. He has nothing but good things to say about this company and loves working for them. When I mention this Palo Alto project, he stated that most of the problems were with the design and the change orders submitted by the city. He also said that I’m sure there were some issues that Flintco created, but look at all their other projects that have gone smoothly with very little problems. I guess we will wait and see what the courts decide on who is to blame.
Now we taxpayers get to foot the substantial bill for city staff time and their legal staff time on this unproductive matter of arguing about a huge, botched project. I have inquired about accountability about the Mitchell Park Library previously and have never heard where the buck stops.
This is how government works, folks.
We need limited government with close oversight.
Thank you to all our local news media, we are fortunate in this community to have that going for us taxpayers.
I’m certain that Flintco has a lot to answer for, but the fact that the two largest libraries in town have been closed at the same time for so long is just mind boggling. We associate this kind of incompetence and hubris with backward countries, not with one of the wealthiest and best educated places in the entire world. Imagine closing both Embarcadero Rd and Oregon Expwy simultaneity for a few years.
No surprise here.
What would you have expected Flintco’s mouthpiece attorney to say “Yep…we screwed up…here’s a check for the damage”.
Come on people. Nothing to see here.
An excuse used by the city hall in the Executive Summary about the botched California Ave. project was that staff was too busy working on the plans for Mitchell Park library.
> Come on people. Nothing to see here.
And I’ve got a bridge that will connect Palo Alto and Stanford that I want to sell you.
Some people will buy anything, as long as it’s sold by government and paid for with other people’s money!
Just legal foreplay before the damages are determined.
I especially would like to know 1) what change orders were issued; 2) who issued them; 3) WHY were they issued (what was the source of the change – was it an internal, staff preference, or was it a result of various community members with close connections to the library, or influence in the library, pushing library or other staff to make changes?).
There was a lot of meddling by certain citizens on the way to approving the Bond, and it didn’t stop there.
Just curious, if this is about the specifications, where is the architect in all this and wouldn’t they be named in the suit? Doesn’t the architect oversee construction? I feel like I’m not getting the whole story.
On the other hand, knowing how these things go IF this is the contractor’s fault, there’s no good choices. You have to cut bait and run, even if it costs more. Nightmare contractors who are always making change orders for every little thing, running up costs, not getting work done — there’s no amount of effort that will fix things and it is better to have someone else come in and fix mistakes.
Who knows whether that’s the case here, I certainly have no cause to trust the City from any of my dealings with them in the past 2 years, including the City Attorney. I’d laugh if it wasn’t my tax dollars paying for it.
This was the first building the city has done from the ground up in over 30 years. All other buildings have been updated or remodel. Watching the city remodel or update these other buildings over the years, I’m not surprise about this.
The courts will hear about this, I promise you! The courts will hear about this disgrace!
Although I don’t know anything about Flintco, I suspect they are not faultless.
I do know something about the City’s technical staff, and I’m certain they could not manage the construction of a doghouse.
City Manager, Keene is incompetent, arrogant, slippery, and an empty suit. How much more incompetence does he have to show before he is removed from his job? Keene does not have the mental ability to be holding the position of city manager. He must have something on his boss. It is the only explanation for why he hasn’t been fired. He needs to go.
Did anyone else notice that the City attorney AND the VP of Flint Pacific appear to family members? John and Molly Stump?
In today’s printed Weekly, there was a person-on-the-street question about what project people would most like to see completed. All but one said the Mitchell Park Library.
I was particularly intrigued by the comment made by some man who identified himself as a floor installer and he claimed the library building had been finished FOR MORE THAN A YEAR.
Anyone know if this is true? If so, can anyone get us an answer about why the opening STILL hasn’t happened?
Thanks in advance.
Assuming that this was a competitive bid here should have been a period when the potential contractors had a questions and answer period hat challenged and unknowns in the specs. Their proposal should have qualified what exactly their understanding was so that in the case of requirements creep it is scope to the original bid.
I was inside the building in the fall (with a hard hat on) and it was nowhere near done. No. where. near.
Apparently, this is a common modus operandi for Flintco. They’ve done exactly this sort of thing with at least 2 other city’s projects–be the lowest bidder then jack up the costs through change orders.
Of course the Flintco guy is going to say the plans were at fault. Whether the courts will be able to sort through the morass of finger pointing will just add to the cost of the project.
@Michael Vilain:
Please provide links or verifiable information. Otherwise, you sound like the PA City manager trying to blame Flintco.
Just Google Calaveras Jail and Flintco. Looks like another job that went long with a lot of poor workmanship.
http://m.recordnet.com/apps/pbcs.dll/article?AID=/20130710/A_NEWS/307100316&template=wapart
I live closer to the Newell Rd Library, but the Mitchell Park Library looks so cool. At first I thought it was going to be a monstrosity, but as it has taken shape and even has landscaping … and up its walls too … it looks pretty damn nice and I cannot wait for it to be finished.
I’d also like to see some responsibility from our side laid for this mess and some action take and people gone. I also think the City Coucil members who were on the council when this happened need to be gone. Somehow we have got to get control of this city back in the hands of competent residents who care about the city and have good judgement and can let the people of Palo Alto know what is happening.
$60,000 penalty on a $59,000,000 project – that’s a .1% overrun due to a subcontractor (concrete) making mistakes. Better than any construction project I’ve been involved in!
Keep in mind San Andreas has politics too, so Flintco is probably being blamed for more than their share on this one too.
In reality, I really don’t care whether flintco under-performed or the City didn’t have their plans in shape, what really irks me is this delay went on for TWO YEARS. There is no one to blame for that travesty other than the City Manager, James Keene. No matter who’s FAULT it was, the City of PA Manager should have resolved the issue MUCH sooner.
Now the tax payers are going to pay for attorneys and City staff time to fight the lawsuit with Flintco, on top of the cost overruns that were incurred from the botched project.
In any private sector industry, multiple people would lose their jobs in a debacle like this, but in the City of PA, it’s business as usual.
What an incredible embarrassment.
Transparency! Is there anyone with some factual numbers showing how much tax $$$$ are being wasted over the course of these decisions/failures and their repercussions with law suits?
I just want my Library DONE.
Change orders seem to be the way these low-bid builders make their real $
They know the ‘prints’ are wrong in places.
They know the client (PA) will do a few ‘OMG that looks terrible/won’t work’
and they know there will be ‘surprises’ at the building site
> I just want my Library DONE.
Sorry Steve .. but it’s not your library. It is being paid for by thousands of property tax payers–most of whom will never set foot in this building.
You are invited to use the vast resources of the Internet, and to buy a few books –which will then be “yours” forever.
Sadly, the fellow doesn’t seem to care much about how is actually paying the bills, or if the money is well spent. There are far too many people in this town who are willing to look the other way as long as their bread is buttered at the end of the day.
To Another Example, you used a example of Flintco being penalized $60k on a $59 million project? I would love all my projects to go that smooth, especially a $59 million project!
To “Clean up City Hall”, with a sweeping “throw the bums out” suggestion, get your facts straight first. Some Councilmembers and some Staff members have been trying to clean up messes made by others before them. There’s no question that errors were made in the Mitchell Park Library effort – some due to wrong headed Council direction and some due to staff response. But our new Public Works Director was not responsible for the Library mess and it’s irresponsible to target him. Similarly records of individual councilmembers should be reviewed – don’t make a wholesale purge.
> Some Councilmembers and some Staff members have
> been trying to clean up messes made by others before them.
And what public records can we look to in order to verify this claim?
> But our new Public Works Director was not responsible for
> the Library mess and it’s irresponsible to target him.
Mike Sartor/Public Works Director/2010–
http://www.paloaltoonline.com/news/2010/11/10/palo-alto-taps-mike-sartor-to-head-public-works—-for-now
Mike Sartor has been on the job since late 2010—over three and a half years. Of course he is responsible for everything that has happened while he has been in charge.
> Similarly records of individual councilmembers should be
> reviewed – don’t make a wholesale purge.
What records can we use to verify this claim? Can you actually provide some actual detail, and not thinly-masked opinion, to help us understand what you are saying?
A lot of insider gossip and opinion here—but not much usable fact!!
Which council member has tried to clean up messes made by others? I may be wrong, but I never heard one council member admit that the council or staff members have made mistake in the Mitchell Park debacle.
Steve >> I just want my Library DONE.
Wilson > Sorry Steve .. but it’s not your library.
It is his library as well as the town’s and I believe the local towns too. Maybe you are not a natural native English speaker, but my does not necessarily mean owned by one person. Example – “My country, right or wrong.” While you may not have the finer points of English grammar down like a native, you certainly seemed to have master the arrogance and snarkiness of many of those on the right.
I want MY two libraries done and open as well.
My Library is my LOCAL library, not ‘Main’ (my normal alternate, but it is closed also) or any other branch.
Just like you can visit on ‘My Street’ or buy ‘My Brand’.
Maybe if City Hall people made decisions like they paid for/’owned’ something, we would not get so much ‘excess’ or waste.
Anybody remember ENRON???? That’s when our Utility Department really started going downhill. And currently it’s o a skid. A lot of the money to pay for this city hall re-do is coming from Utility Funds. We-the-people pay those funds. We’ve been had….big time.
PA can Just do the usual “extortion” of Stanford for more millions. No problem.
I am long time Palo alto resident, and I see lots of Trolls here against the city of Palo Alto. The only mistake our city did was to choose the lowest bid from this Company from Texas/Oklahoma. Please see what San Francisco does: never choose the lower bid!
Bob, I see the point you are making and I suspect Utilities staff were “volunteered” to pay for the City Hall Lobby re-do. I do not recall hearing comments from Utility customers that the lobby facilities were inadequate.
@ Emily Renzel –
You say that “our new Public Works Director was not responsible for the Library mess, and it’s irresponsible to target him”.
You really need to get your facts straight instead of attempting to cast aspersions elsewhere.
The Current PW Director was the Assistant Director in charge of the Engineering Division with direct oversight responsibility for the Library project during it’s entire planning, design, bidding and now construction process. He was then promoted to the Director’s position by the current City Manager after the project was under construction.
Further, he was a direct supervisor of the Senior Engineer who had day to day management responsibility for the project design. he subsequently promoted that individual to a Deputy Director position.
“Not responsible”? Your definition escapes me……..