Details of the Third-Party Investigation Obtained
BY LEANN DILBECK –
Arkansas Department of Parks and Tourism [ADPT] officially terminated its contract with WAI (Wade Abernathy, Inc.) on August 21, 2013 but has never released any of the details surrounding the delays in construction on the $6.7 million remodel and expansion to Queen Wilhelmina Lodge, only saying that “performance issues” provoked the termination.
Upon the termination, Gregg Butts, Arkansas State Parks Director, said that under the terms of the bond, a new licensed contractor would be on-site within 10 business days but now almost five months later, work remains at a standstill.
Wade Abernathy, Jr. has not spoken publicly since the termination but spoke exclusively with The Pulse on how the entire process has him posing one question: “Parks terminated the contract with me, with the knowledge this act would further delay completion by now going through the termination process, after we fulfilled each request we were given, and involved the Surety in negotiating an agreement to find a completion contractor before any work can resume.” Abernathy is as interested as many others in the local community as to “why?” Abernathy explained that the project encountered latent conditions beyond his control and the independent investigation confirms his position.
The Pulse has obtained a copy of the third-party investigation concluded by Travelers Casualty and Surety Company, the Surety on the bond, with the findings of its investigation that was provided to ADPT in November 2013. The investigation included combing through thousands of documents submitted by both WAI and ADPT.
The report states that ADPT “alleged that WAI failed to provide sufficient resources to the project to complete it in a timely manner; permitted mold infestation in the building that required remediation; and failed to maintain quality control over construction.” ADPT issued a “cure letter” to WAI with conditions that must be met to avoid termination on grounds of default, of which, the report concludes all requirements were fulfilled by WAI. The report says, “To cure the defaults, the State required WAI to complete the building exposure (to get the job in ‘the dry’); execute a mold remediation plan, and submit a realistic schedule for completion.” In an ironic twist to the saga, January 14, the same day of this story, was to be the revised completion date.
WAI contended that delays in construction occurred from circumstances beyond its control that should extend the completion date; that mold pre-existed construction; and that it adequately protected the building, equipment, and materials from the elements. Furthermore, WAI contests the propriety of the default termination undertaken by ADPT and is confident in the case it will be submitting to the Arkansas State Claims Commission outlining its damages, since the State has “sovereign immunity” and unable to be pursued in a lawsuit.
The investigation researched three key default claims made by ADPT for termination. The 8-page report details the findings of the independent investigation:
1. At the time of the termination, did WAI have sufficient resources to complete the project in a timely manner based on approved and/or entitled time extentions?
FINDING: The Surety reviewed the project schedules, daily logs, and approved change orders and change order requests and found support for WAI’s ability to complete the project on time. Using January 7, 2014, as the date of substantial completion, WAI, according to its daily logs, did seem to have sufficient resources and a construction schedule in place to achieve substantial completion in a timely manner.
2. Did the State delay the project by taking control of mold remediation and imposing an overly broad unnecessary mold remediation plan on WAI? (not included in the original scope of the project)
FINDING: The Surety investigated the mold in the building, communications between WAI and the State on mold, and the mold reports and remediation plans obtained by WAI and the State. The information reviewed suggests that the State failed to accept any responsibility for mold remediation despite its knowledge of pre-existing mold; that delays in construction resulted from time taken by the State to identify a remediation plan (thus constituting concurrent delay); that the State refused to take responsibility for pre-existing mold; and that the mold remediation plan obtained by the State seem excessive given the scope and type of mold – both pre-existing and subsequently arising mold – present in the building.
3. Did any quality of construction issues rise to the level of a material default and/or became non-issues when the State agreed to pay for them knowing of alleged problems?
FINDING: The State acknowledged that ‘the overall quality of most of the construction is acceptable,’ but it considered a few construction items unacceptable. The Surety investigated the items that the State considered unacceptable and questions whether they rise to the level of material defaults under the contract or, alternatively, whether they had been ultimately accepted by the State when it paid for them ‘as is.’
Adding to Abernathy’s propriety claims, “WAI did all it could do to attempt to resolve the issue. WAI requested to meet with Parks and the Arkansas Building Authority to mediate issues, but Parks refused…even though it is a condition of the contract. WAI requested to sit down with Parks one on one to mediate issues, but Parks refused. Travelers requested that Parks allow WAI to supervise and manage the project through the Surety to expedite the completion and Parks again refused.”
The report filed by Travelers confirmed, saying, “The Surety has been proceeding on a dual track to attempt to arrange for the completion of this project utilizing WAI. The State informed the Surety by letter dated November 1, 2013: ‘WAI proposing to work directly with ADPT in completing the project is not an acceptable option to ADPT.’ The Surety is disappointed with this turn of events because it had the impression that the parties were making positive progress toward an amicable and acceptable interim solution to this situation that would have allowed the project to move forward while the parties otherwise attempted to resolve their differences.”
In addition, Abernathy said that his first knowledge of the termination was via Facebook when the letter was leaked to State Representative Nate Bell prior to WAI being notified.
For the best interest of the project, Abernathy continues to cooperate by providing information to facilitate a completion with a new contractor, even though he is no longer under any contractual obligation to do so. “We were over 70% complete when WAI was terminated in mid-August. Some of the best weather in August, September, October, November and part of December have been lost. Currently, Travelers is negotiating with a completion contractor. We cannot offer any details of that; however, WAI has been and continues to cooperate with the Surety by providing subcontractor and supplier documents and information.”
Abernathy minced no words when he also said that he will aggressively seek legal remedies for damages from Robin Borne of the Borne Firm who served as the architect on the project and who Abernathy alleges “performance” contributed to unnecessary delays. Borne will not enjoy the same “sovereign immunity” as ADPT.
Abernathy also explained that he has yet to be formally requested to attend the upcoming meeting of the State Agencies and Governmental Affairs Committee that ADPT has been called to appear before by State Representative Nate Bell. Although he does plan to attend and is grateful that ADPT is being questioned on their decisions that have ultimately cost the taxpayers. “We are confident that the facts brought forward as a result of the Governmental Affairs Committee will finally set the record straight.”
The Pulse will continue to follow this developing story.
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