New Hope imposes liquidated damages for late project completion

The City of New Hope will impose $24,500 in liquidated damages from Artistic Stone and Concrete for not substantially completing the Xylon Avenue streetscape project by the deadline.
The contractor has to agree to the liquidated damages at a formal council meeting before the damages can be assessed.
The liquidated damages will pay the city’s costs, for Stantec’s ongoing work with the project beyond the agreed-upon timeline.
Community Development Director Jeff Sargent told the city council at the March 20 work session that if the contractor approached the city three months earlier and stated he was behind schedule and needed to extend the date, the city would have likely done all it could to approve an extension.
“What we didn’t hear along the way until it was done, was that (the contractor) couldn’t get the material from the subcontractor,” said Chris Long, the city’s engineer through Stantec.
Artistic Stone and Concrete was hired in June 2015 to complete the vertical elements of the streetscape project including banner columns, the colonnade entry sign, digital electronic reader board, pergolas, ornamental fencing, lighting and electrical elements.
The bid price was $1.1 million.
Originally, the contractor set a substantial completion date of Oct. 30, 2015. Due to delays in the overall project not caused by the contractor, the contractor was unable to achieve the preliminary timeline.
In December 2015, the council approved three change orders, one of which was a new substantial completion date of May 2, 2016.
Artistic Stone and Concrete substantially completed the project June 20, 2016, which was 49 days after the new completion date.
The contract stated that the city may impose a fine of $500 per day for each day past the substantial completion date, if warranted.
Sargent said he believed it was warranted.
“In this case we think there is a good argument because of the fact that there was substantial extra time by Stantec for inspections and overall review of that project as it was going on for those 49 days,” he said.
In addition to not receiving the materials in a timely fashion, 48 banner columns, one of the last elements installed, were built incorrectly.
“There’s a lot of eyes on this trying to get this right,” Long said. “It’s the contractor’s responsibility to make sure this (project) is right.”
Sargent credited the contractor for the quick solution once the issue was realized.
“It was impressive how quickly they corrected the issue and they were back out installing (the banner columns),” he said.
Bill Zebro, project manager for Artistic Stone and Concrete, said the company did not find the issue about getting the materials until mid-March 2016.
According to Zebro, the contractor held their supplier “to the fire” but he admitted the issue was missed. Once the contractor received the materials, workers installed the colonnade elements, which were more important to complete early.
When workers began installing the banner columns, they realized the columns were made wrong.
“I’d also like to mention that this was a hard bid project with a set of specifications and set of construction drawings,” Zebro said. “We took a lot of time and a level of cooperation to try and get the project completed. A lot of time on our own. We did not ask for those fees to be paid to us because we wanted to get the project done. We did incur a substantial amount of fees to redesign this project.”
Mayor Kathi Hemken questioned city staff members as to whether the city was in the wrong on this issue.
“I don’t think so,” Sargent said. “I think as a city we’ve done everything we can to accommodate them. We didn’t hear any additional requests for change orders.”
According to Sargent, the contractor claimed he picked the original date arbitrarily and did not understand why he could not pick a different date.
Sargent explained it was included in the contract.
“If they picked out the date, and I’m sorry if I’m missing something here, why should they not be held to it?” Councilmember John Elder asked.
Councilmember Jonathan London said the contractor should have had his own set of contracts with subcontractors with liquidated damages included if the materials did not arrive on time.
“The contractor has to hold those people accountable,” he said.
Councilmembers Andy Hoffe and Eric Lammle were favorable to imposing the liquidated damages.
“We’re entering into a lot of contracts and it’s necessary for us to hold people accountable for their contracts otherwise we’ll get a lot more in the future,” Hoffe said.
Despite the delayed completion, city staff members and council members agreed the contractor’s work looks great.

Contact Gina Purcell at [email protected]