ConstructionPro Week, Volume: Construction Advisor Today - Issue: 40 - 01/28/2010

Clark County Regional Justice and Detention Centers at Heart of Another Legal Battle

The key players in the construction of the Clark County (Nev.) Regional Justice Center and the adjacent Detention Center in Las Vegas are back in court. This time, the county is suing its engineering contractor, Pasadena, Calif.-based Jacobs Engineering Group Inc. The projects both ran tens of millions of dollars over budget and finished nearly four years behind schedule. In its latest court filing, on Jan. 20, the county is seeking undisclosed damages for Jacobs’ “gross mismanagement” of the projects as well as for its role that led to major delays and cost overruns.

 

In 2005, the county and AF Construction (AFC), the general contractor for both projects, reached an arbitration decision that ultimately awarded a little over $40 million in delay damages, time and materials costs and prejudgment interest to AFC for its work on the Detention Center. Three years later, another arbitration board convened and awarded $52.7 million to AFC and its surety for work on the Justice Center. In that latter decision, the board publicly released a lengthy and informative decision in which it enumerated how each party materially breached the contract. (Construction Claims Advisor

covered that arbitration decision in the Feb. 23, 2009, issue. A copy of the 195-page decision is available for download on our website.)

This newest set of complaints alleges that Jacobs’ mismanagement led to the county’s nearly $100 million arbitration payouts to AFC, a sum that has Las Vegas residents fuming. The county contracted with the firm in May 1997 for $18 million to oversee work on both projects, as well as two smaller projects. Among the 14 complaints, the county alleges that Jacobs’ project manager Ken Adams misrepresented his qualifications, credentials and education. Though the company supposedly knew of his exaggerations and lack of experience to oversee projects of such magnitude, Adams was allowed to continue in his role until he was eventually removed in 2003.

 

In addition, the county faults its engineering contractor for egregious technical mistakes and construction defects that led to the numerous delays and cost overruns that culminated in the massive payout to AFC. The county’s suit also lists grievances for breach of contract, fiduciary duty and good faith, professional negligence, and other intentional misrepresentations.

 

Jacobs has 21 days to respond to the complaint.

 

Unlike its contracts with AFC, the county’s contract with Jacobs did not include an arbitration clause. Hence, the county was forced to wait until its arbitration proceedings with AFC had concluded before it could file its complaint in the Eighth Judicial District Court. On a poetic note, the court is housed in the very building at the center of the complaint.

 

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