Town to settle with construction firm
Issue centered on building for Jackson DPW
BY DAVE BENJAMIN Staff Writer

P ay the bill now. That's what members of the Jackson Township Council voted to do on Sept. 9 in a legal matter that involves the municipality and Gavan General Contracting, Lakewood.

The council voted 4-0 to amend the 2008 budget to include the payment of the settlement to the construction company. Councilman Scott Martin was absent from the meeting.

At issue was a contract issued in 2005 for the construction of a steel building at the Department of Public Works. At that time there were separate contracts for the concrete, steel, plumbing and other materials. Gavan was supposed to furnish and erect the steel building, according to municipal officials.

However, a contract for the concrete was not awarded until later and the concrete was not done in a timely fashion. That delay impacted Gavan's part of the project.

After a period of time, Gavan representatives notified Jackson that they were terminating their contract. The issue went to arbitration and the ruling favored Gavan.

After a subsequent challenge in court by the township, the judge again ruled in favor of Gavan.

Resident Dan Gross addressed the council on the matter on Sept. 9.

"At the last meeting I think I was told that the council was going to revisit some of this and gather some additional information. I would like to hear what was found out and what the public needs to know," Gross said.

Council President Michael Kafton said an investigation into the matter was still under way.

"There is an enormous amount of paperwork that is involved. This has been going on since the latter part of 2005. I've gotten through a considerable amount of paperwork on this issue and I have not drawn a final conclusion," he said.

Kafton said Gavan's bill, which amounted to $124,055 as of Aug. 15, should have been paid at the beginning of 2008, but has lingered since then and has cost Jackson an additional $13,000.

Gross asked why more time was needed and asked if the council could just pay the bill now and put an end to the late fees.

Kafton responded, saying, "I don't want to extend the time while I finish all the research. We knew nothing about this [prior to the last meeting and] we needed time to digest what this was all about."

He said although there is still more to be learned, in the end the bill will still have to be paid.

"At the beginning of March the contractor said that if we paid the bill within the next 45 days, they would waive any fees. Unfortunately, the town for a second time ignored that," Kafton said.

He said he wanted to pay the bill now.

Gross asked Councilwoman Ann Updegrave, who was not present at the previous meeting when the subject of the outstanding bill came up, if she had any thoughts about what had transpired.

Updegrave said a lot of information was received and reviewed by the attorneys, but said the contract with Gavan goes back a number of years.

"I can't answer why there was a delay on this, but it did have to go through a certain amount of legal avenues," she said.

Gross said the legal issue had already been settled and now it was a matter of when Jackson would pay up.

Kafton said the issue now is to avoid any more increases.

"I think from this time moving forward we have to draw up our findings on the research, make recommendations going forward and if necessary take any disciplinary actions that may be needed [provided] there is anyone at fault," he said.

"This was totally ignored for several months and that is why I would like to continue with my research to find out who dropped the ball and why," the council president said.

Kafton reviewed what he had found in his research to date.

"There were not enough funds in 2005 based upon the bid," he said. "So it had to be re-bid again. The township became the general contractor in order to save money."

Bids were made separately for the (steel) building and then for the concrete slab, Kafton said. He explained that bids were made for the concrete slab and were turned down and then they had to bid again.

During that time frame there was a delay in getting Gavan to start its part of the process because the firm needed to have the concrete in place. The delay also resulted in requests to the town from the contractor for an increase in the price of its bid due to the cost of materials and time.

The firm got an extension for eight weeks and was told it would be compensated, Kafton said. In August 2006 the township shut down the construction, which resulted in a lawsuit by Gavan.

Kafton said that in May 2007 the township could have tried to negotiate with Gavan, but the township cancelled the contract instead, which sent the matter to arbitration. He said the situation could have been negotiated because there was only a $40,000 difference at that time.

"Now it will cost the taxpayers $125,000. That's what we have so far," Kafton said.

Contact Dave Benjamin at dbenjamin@gmnews.com.