TRYON/EDGEWOOD SANITARY SEWER PROJECT
Owner: City of Lubbock
General Contractor: Greystone Construction Corp.
Total Contract: $1,488,531.00
Project Overview
The project consists of two contracts for sanitary sewer, a pump station and road repairs. Contract A includes the pump station and repair of Tryon Rd. from C.T.H.OO to just west of Edgewood Drive. Contract B includes the repair of the west portion of Tryon Rd. and all of Edgewood Drive and Cedar Lane. The bids were opened on June 6, 1995. Work on both contacts was to be completed by the fall of 1995.
Street & Smith’s Written Quotation
On June 6, 1995, Street & Smith submitted a written quote to Greystone, along with other sewer contractors on three items of work, which are listed below.
Item #4Lift Station Bituminous Pavement130 s.y. @ $15.90 = $2,067.00
Item #12Bit. Pavement Replacement (A) 11,600 s.y. @ $3.65 = $42,340.00
Item #23Bit. Pavement Replacement (B) 18,000 s.y. @ $3.65 = $65,700.00
Item #4 consisted of 10" base course & 5" asphalt pavement.
Items #12 & #23 consisted of pulverizing the remaining asphalt pavement after the sewer was installed, shaping the pulverized base and constructing a 2.5" asphalt pavement binder course.
At the time Street & Smith submitted its quote, it anticipated performing the three items of work listed above sometime during August or September of 1995. However, Street & Smith did not put that expectation in its written quote.
General Time Line
On June 8, 1995, Street & Smith learned that Greystone was the low bidder on the project. Street & Smith's Project Manager called BrianFischer at Greystone to see if Greystone used Street & Smith for the asphalt pavement work on the project. He responded that he did.
By July 31, 1995, Street & Smith had not received a subcontract or otherwise heard from Greystone. As a result, Street & Smith's Project Manager, called Greystone to find out if they had the job. According to BrianFischer of Greystone, the City had delayed the start of the work on the project because not all of the right of way area needed was available.
On August 7, 1995 - Greystone finally began work on the project.
STAGE NO. 1
At this stage:
- What are Street & Smith’s “interests” ?
- Brainstorm and list all of Street & Smith's options.
3.For each option, list the advantages and disadvantages.
4.Select the option your team believes to be the best.
5.In selecting your option, what, if any, assumptions have you made? (Examples of assumptions could include: (1)That Mr. Fischer is telling the truth about the reason why the beginning of work is being delayed; (2)Street & Smith will have a crew available to do the work.)
6.What do you believe Greystone's needs are at this stage?
7.What questions would you ask BrianFischer?
8.What additional information would you like to have?
September 10-24, 1995 - Street & Smith's Project Manager frequently called Brian, seeking to find out when Street & Smith would be able to perform its work on the project. Brian finally told him Street & Smith would be able to perform its work sometime in October.
October 10, 1995 - Street & Smith's Project Manager once again called BrianFischer about starting work. Brian responded that Greystone was still not ready for Street & Smith.
Finally, in mid-November, Street & Smith was given direction to start work. During the third week in November, Street & Smith's Project Manager met with SteveMiller of Johnson & Roe , the owner’s representative and BrianFischer of Greystone about the project. Street & Smith's Project Manager warned them that the base was too wet for Street & Smith to construct its portion of work. SteveMiller threatened that if Street & Smith didn't get going liquidated damages would be imposed. At this poin, the Champion's Village project was also being constructed along Tryon Road. Johnson & Roe was also the engineer on that project and had directed that it not be paved if the base was too wet. Interestingly, the base on the Champion's Village project had been proof rolled, while the base on the Edgewood Sanitary Sewer Project had not been proof rolled.
STAGE NO. 2
Street & Smith has warned the Project Engineer and the General Contractor that the base is too wet to pave. You sincerely believe the pavement will not be satisfactory if paved on the wet base. The Project Engineer has threatened to assess liquidated damages, which of course the general contractor will pass on to Street & Smith.
At this stage:
1.Describe the problem.
2.Brainstorm and list all of the options Street & Smith has.
3.For each option, list the advantages and disadvantages.
4.Select the option which your team believes to be the best.
5.The Engineer's position as stated is that if Street & Smith does not begin paving, liquidated damages will be imposed. What do you believe the Engineer's needs are?
6.What questions could you ask the Engineer to find out his needs?
7.What are Greystone's needs?
8.What are Street & Smith's needs?
9.What are win-win solutions to the problem?
10.How would you convince the parties to adopt the chosen win-win solution?
On November 25, 1995, Street & Smith's pulverizer moved onto the project site and pulverized all of Edgewood Dr. and most of Cedar Lane.
By November 28, 1995, Greystone had not finished its work at the intersection of Cedar Lane and Tryon Rd. As a result, Street & Smith couldn't pulverize, shape and pave the west part of Tryon Rd. or the cul-de-sac end of Cedar Lane. This meant the crews would have to be remobilized later.
OnDecember 2, 1995, Street & Smith's grading crew move in and shapes pulverized areas for paving. On December 7 and 8, 1995, Street & Smith's paving crew paved the shaped and pulverized areas. While doing so, the paving crew had a lot of trouble because the base was wet.
On December 15, 1995, Street & Smith's pulverizer moved back in to finish Cedar Lane and the west portion of Tryon Rd. This time the base has several soft spots. On December19, 1995, Street & Smith's grading crew moved in to shape second pulverized area, and on December21, 1995, Street & Smith's paving crew paved Cedar Lane and west part of Tryon Rd. Once again the base had several soft spots.
From January through July, 1996 - SteveMiller of Johnson & Roe refused to release payment on the project because of several bad pavement areas and many other sewer and punch list problems.
STAGE NO. 3
Street & Smith paved under protest. As expected, the pavement failed in several areas. Street & Smith still believed the failure occurred because of the inadequate base. In spite of that, the Engineer refused to make payment to Greystone who in turn refused to pay Street & Smith.
At this stage:
1.Describe the problem.
2.Brainstorm and list all of Street & Smith's options.
3.For each option, what are the advantages and disadvantages?
4.Select the option your team believes to be the best.
5.What are Street & Smith's needs?
6.What are the Engineer's needs?
7.What are Greystone's needs?
8.Are there any potential win-win-win solutions to the problem?
During the first week of July, 1996, Street & Smith's Project Manager met with SteveMiller and BrianFischer to discuss fixes for PhaseI and the schedule for PhaseII. As expected, they were not able to agree on who is at fault for failures or who will be responsible. They did discuss the next phase and that it needs to be done. Steve points out that Greystone is out of time and if they don't get PhaseII done they will be assessed liquidated damages. Street & Smith's Project Manager stated that Street & Smith would not start PhaseII work until Street & Smith received some payment for PhaseI. Steve stated that Greystone had been paid a partial payment for PhaseI, but had not been paid in full due to the pavement problems. Brian agreed with Steve's statement, but said that Greystone had just got paid in June and it took too long. Steve promised that if Street & Smith would construct PhaseII he would approve payments to get Street & Smith paid promptly.
STAGE NO. 4
You are Street & Smith's representative at the meeting with Steve and Brian during the first week in July. Street & Smith has been paid nothing. You learn that Greystone has recently received a partial payment. Steve once again threatens to assess liquidated damages if PhaseII is not started immediately. On the other hand, he promises prompt payment for the PhaseII work if it is completed soon.
At this stage:
1.Describe the problem.
2.Brainstorm and list Street & Smith's options.
3.For each option, what are the advantages and disadvantages?
4.What are Greystone’s needs?
5.What are the Engineer’s needs?
6.What are Street & Smith’s needs?
7.What would be a win-win-win solution to the problem?
On July 16, 1996 - Street & Smith’s pulverizer moves in and pulverizes all of Tryon Rd. except west end (from last phase).
On July 16-19, 1996 - Street & Smith's grading crew moves in and shapes and proof rolls the pulverized Tryon Rd. Some areas which were soft were marked and Greystone came in later and undercut to repair.
On August 5, 1996 - Street & Smith's grading crew moves back in to shape Greystone's repair areas for paving, as well as stone pump station area.
August 7, 1996 - Street & Smith's paving crew moves in and paves Tryon Rd. and the pump station. One soft area appears while paving near ChampionsVillage. Street & Smith’s foreman backs the paver up and paves over the soft area a second time.
On August 23, 1996 - SteveMiller of Johnson & Roe writes a letter to Greystone detailing what he wants fixed before the City will accept the project.
September (1st week), 1996 - BrianFischer and Street & Smith's Project Manager meet to go over some potential repairs. They walk the project and come up with much less than described in Steve's August23 letter.
In approximately November, 1996 - Street & Smith's Project Manager fully measures and reevaluates repairs needed and prepares a sketch showing areas which detail patching and overlay limits. Street & Smith’s Project Manager learns that the City and Greystone are in a major dispute over the unacceptable paving and delays and the City is going to pull the bond on Greystone.
May 28, 1997 - City and bonding company (Fidelity & Deposit of Maryland) meet to go over project (City is holding approximately $250,000.00 for unaccepted work and liquidated damages).
June 27, 1997 - City gives Greystone a proposal to fix, but Greystone does not agree. The proposal basically said everything was Greystone's problem to fix.
August 20, 1997 - StevenCarlino at Fidelity & Deposit, Greystone's bonding company, sends a letter to Street & Smith stating that Street & Smith will be paid per the engineer's quantities, but only if Street & Smith pays for some repairs. Street & Smith's Project Manager does not agree to these terms.
STAGE NO. 5
At this point, Greystone's bonding company has gotten involved. The City and Greystone disagree over the responsibility for repairs. The bonding company has proposed to pay Street & Smith for the work it performed, but only if Street & Smith will make all of the repairs at its own expense.
1.Describe the problem or problems.
2.Brainstorm and list all of the options Street & Smith has.
3.For each option list the advantages and disadvantages.
4.The Bonding Company wants Street & Smith to make all of the repairs at its expense, what do you believe are the bonding company's' needs?
5.Assume that the Street & Smith internal cost of doing the repairs is $15,000. Would you be willing to do the repairs at Street & Smith's expense as requested by the Bonding Company?
Street & Smith's Project Manager writes a letter back to the bond company stating what Street & Smith is owed and offer to pay for one-half of the repair work to get this project finished. The letter also states the terms under which Street & Smith will perform the work.