Travis County Commssioners Court
February 4, 2003
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Item 19
Number 19 is to approve termination of contract number o 2 yooo 79-eh with boiler burner sales and service incorporated for boiler replacements in building 160 at the Travis County correctional facility. Morning.
>> good morning, sue grimes, county purchasing agent. Back in December of '01, we issued an ifb for two boiler replacements out at del valle. One of those boilers has been installed and is working correctly. The second boiler, however, we've had problems with. As you can see in the backup. My staff and the sheriff's office staff, the county attorney's office staff have worked for several, several months, almost a year, to try to get boiler burner sales and services to complete the work on this boiler, and they basically have refused to perform that work. Joe is here to kind of let you know what the plan is for getting this resolved and also john hilly from a legal perspective. It's our recommendation unless we get other direction from the attorneys that we terminate this contract, withhold retainage of 10%, which is about $6,500, use that money to try to get someone else to come in and complete that work, and we also made boiler burner aware that if there were any other costs over the 6500 that they would be liable for that damage to the county.
>> the one thing that's come up that we need to talk about this morning is that the sheriff may be interested in a lawsuit to sue for specific performance. Since I have not had a chance to address that issue, it may be one that we may need to wait until later in the meeting until i've had a chance to research the impact of the termination of the contract in relation to specific performance. Just to leave all your options open, it's all in the same paragraph in the contract, but I'm not sure the case law works out. So if we can put this item off until later in the agenda, maybe after executive session, I would be able to advise you more fully.
>> what's the contractor say about completing the project?
>> I think his problem was that he was the low bidder, and he probably bid the job less than what it's costing him to do it. He has not paid his supplier, which is the bigger problem, I think. There's still some finishing up of the installation that the -- insulation that the contractor would need to do, and in the contract it requires that the factory send representatives down to do the start-up. Since the factory and the supplier have not been paid, boiler burner failed, they refused to come down and do the start-up and the finish-up, what we would be doing if they came down to do the start-up. Any route we take it's -- I'm not sure that the contractor will pay the supplier, which create a greater problem, warranty and parts replacement down the road, so not only they did not finish the project, they've created a problem for us down the road.
>> what does the contractor say about not finishing the project? He's saying nothing?
>> he's been pretty much nonresponsive to our communications.
>> he basically told me he was not going to finish the work in a telephone conversation. That's when we started sending written communication and received no responses from him.
>> this work is important to us, I take it?
>> yes, sir, it is.
>> he's indicated that he will not or cannot perform --
>> he's not given us his reasons, but he's made it clear that he would not finish the work. It's just my supposition that --
>> but he didn't do it.
>> it was supposed to be done this past fall. The final work should have been done this fall. And now we are getting into spring and he's not completed the work.
>> this says on may eighth and June -- July 11, 2002, a letter was sent to the vendor asking for resolution of the remaining uncompleted issues. And we have not heard from him since.
>> there's been communications. There's been communications back and forth, but they have not done the work. I think they did incremental work. There was an issue with the pump. They came out and did that work. They've done some incremental work, but they've not completed the final installation and start-up of that boiler.
>> john, I guess my question is, even if we were to -- if we were to win a specific performance lawsuit, it seems to me that practically speaking we're in a posture where we need to go ahead and complete this work, sue him and try to get whatever reimbursement we can.
>> and that is certainly allowed under the contract, that if you terminated the contract, then hired another contractor to perform the work, whatever that difference in the value is, you can sue for that balance.
>> and the question is if we got a judgment, whether we could collect on it.
>> right.
>> but isn't that a better course considering the history of this project?
>> that was our conclusion until we had heard this morning that --
>> I knew it was simplified for us if we could get him to complete it, and I know your name on a petition has often worked wonder for us. But I'm assuming that if we sent out letters in early summer of last year and really haven't gotten positive action --
>> and we had a conference call with that contractor and his attorney on the phone, it seemed like it was late summer, bonnie.
>> July 17th.
>> and they committed that they were going to come down as soon as the cold weather came in, they were going to come down and light up the boiler and everything would be working once again. But joe has made those calls and we've never received that final performance.
>> and my conversation with boiler burner was thanksgiving. I remember having this conversation at thanksgiving saying, you know, we've been waiting and him basically telling me at that time that he was not going to complete the work and we could do whatever we wanted or needed to.
>> have we had anybody indicate to us whether or not $6,500 is even anywhere near the ample amount to finish this job? Do we have any feeling for that?
>> well, we talked to one contractor, which he seemed reluctant to get involved because there may be a lawsuit between the supplier and the contractor about the payments for the equipment. So --
>> did he give you a quote, a price quote?
>> joe had mentioned this morning that he -- joe, you might want to talk about this -- whether you thought we could start that boiler up and have the state inspector come and that would be -- of course, that has warranty implications.
>> depending on the action the court takes, there are several options that we were looking at. First of all would be to invite a number of contractors to see if they were interested in finishing the project and starting the boiler up. The second option was for us to get the starting procedures from the manufacturer. They'll release it without being paid for the equipment. And use our own people to start it up. The state inspector comes in and inspects the operation anyway, so we know from the state inspector whether we're safe when we're operating it. The final option is to simply take the boiler out and put another one in there, but, of course, that would be more money. The problem we have still is that if there is any pending litigation between the contractor and the supplier, whether there's any chance that -- if that is not settled that the supplier would want to come in appeared take the boiler out after we went to all that trouble?
>> after the fight?
>> after the fight, yes, sir. So it's relatively complicated because we would like a warranty on the boiler and we will also like the supplier and the manufacturer to fly splooi us with parts down the road.
>> john, we have a rather narrow agenda item --
>> meaning if you wanted to take some other option rather than a termination.
>> it could be helpful if we reposted it differently next week.
>> do we need to let you huddle, review the comments and recommend a specific one to us next week?
>> I think that would be the best option, judge.
>> now, commissioner daugherty was hinting that we ought to try to figure out what the cost may be. I think that the $6,500 may not get it done. And do we need to check with whoever -- we got the equipment from and who has not been paid and find out what was owed. And when you check with the vendor and his lawyer and let them know what we are being told. This is lawsuit bound anyway, isn't it?
>> yes. [everyonetalking at once]
>> $50,000 -- $50,090 is what he owes the manufacturer for that piece of equipment.
>> there are several folks involved. The manufacturer, the distributor, the supplier and the contractor. The manufacturer sold the boiler to a corporation called rand corporation in san marcos. They sold it in turn to industrial supply in san antonio, who in turn sold it to the contractor. It's my understanding from the manufacturer and i've talked to the president of the company that manufactures the equipment, and he says that we have not been made. So I assume that no one has been paid. And really the manufacturer is out the money.
>> but our contract is with boiler burner sales. They are liable for paying all of their contractors, subcontractors and our contract is with them and their required to do all the work necessary.
>> they're still in business, our vendor?
>> we've paid them everything.
>> we've paid them everything but 10%.
>> I think it's what we ought to do. It seems like we've got a long list of demand here for specific work. That's been ignored in the sense that there hasn't been any positive response, although there has been telephone conversation. I think we ought to do that. If we were to finish the work and sue for additional costs to us, we would want to let the otherwise who think their old money know if they want to join the lawsuit, they would join it against them instead of them coming after us.
>> or in the alternative, if there's already a lawsuit filed by a supplier against a contractor, we may want to join that one. There are several different options.
>> this is behind lock and key in del valle.
>> yes, sir.
>> it's pretty big. They can't just come grab it and run away with it.
>> does ronler have any opinion on this? Has he been involved at all? Since he is a facilities person with us. He seems to be a pretty versatile guy prosecute what I have found.
>> roger always gets mad at me when I call him to help us out with these projects, but I had not talked to roger on this project specifically. I got him involved in the big jail renovation, you know.
>> if we need other options we need other posting.
>> we'll post it for next week. We will bring it back next week for other posting with options and hopefully have some price quotes on your opinion. Part of the problem is getting the people to come in and fix it behind another contractor.
>> if y'all will consider those options and let us know which one we ought to adopt, that would help us.
>> okay.
>> this problem has been kind of pending for some time. We need to go ahead and resolve it one way or the other. And we know what the cost is and I think we ought to identify a source of funding. Terminate the contract means that basically we assume responsibility for getting the work done one way or the other.
>> there is a balance at the county.
>> if there is more than the 6500 that we have, we retain that amount. We have those funds available. If it's more than that, then whatever action the county attorney takes as far as lit geation to get them to pay us the difference.
>> we'll keep our fingers crossed that 6500 will cover it, but if not we need to know what the additional money source of funding. How's that. So let's have it back on next week. How's that, john? Instead of later today.
>> I think that will give us more time.
>> is that too soon.
>> we need to get it resolved.
>> all right. We'll have it back on February 11th. That will be a short meeting, but if y'all go through the options and come in and recommend a specific course for us and make sense, I'm sure we'll get it done.
>> thank you, judge.
>> thank y'all.
Last Modified: Wednesday, April 2, 2003 10:25 AM