Building Corporation approves resolution

As expected, the Greene County Building Corporation approved on Wednesday afternoon a resolution that calls for Weddle Brothers Construction Company to return to the county courthouse worksite or face stringent ramifications.

The consequences of the general contractor not resuming work on the beleaguered courthouse project with due diligence could include the issuance of default and termination notices, the actual termination of the construction agreement and a demand for the performance bond surety holder to finish the project, according to the resolution.

The Greene County Board of Commissioners passed a similar resolution Tuesday afternoon meeting in Bloomfield that endorsed the past actions by the Building Corporation in an effort to get the dispute resolved. The resolution also recommended that the Building Corporation take all available legally binding methods to force Weddle Construction back to work.

Yesterday, the motion to pass the resolution was made by Dave West and seconded by Plato Spencer. Building Corporation president Amos Musselman did not attend the meeting, but was consulted about the contents of the resolution prior to its drafting by attorney Marilyn Hartman.

"This does not terminate the contract; it simply puts the county in a position where if we don't get a response we hope from Weddle, we will be in a position so there will not be a delay. The slowing down of this project is costing the county money and we need to move forward with it. We don't want to be in a position where there is no ability for this building corporation to take action towards termination (of the contract). We have agreed and will be sending Weddle problems some specific requests for documentation on the delay to claims. From the county's standpoint, we thought that issue had been resolved by taking it to litigation," Hartman explained. "Ultimately, if Weddle is not going to honor its contract obligation then what we've passed today will literally authorize termination of the contract.

"This is just a difficult situation. There are two sides to every story. Weddle feels it's entitled to money. We (the county) don't believe that is true, but nonetheless, we are continuing to move forward in search of a resolution."

Hartman and project manager Jim Corey pointed out that this is not the first time that Weddle has threatened to walk off the job. The last time was in 2005 when the Building Corporation paid Weddle $600,000 to keep them working.

"At that time the agreement specifically addressed the Phase 1 and Phase 2 delays. In that agreement, the parties indicated that we would be naming Weddle as a defendant in the lawsuit and the claims would be included in the litigation," Hartman said. "Weddle now coming back and demanding payment of ($710,000) Phase 2 delay claims is a real surprise to the Building Corporation and to the county commissioners."

Corey added, "We've had to do similar things (threaten to terminate a contract) to this contractor before."

Building Corporation member David West asked what the bound carrier -- United States Fidelity & Guaranty (USF & G) -- would do if Weddle fails to return to work.

Corey said if the situation comes to a point where Weddle simply will not come back to the job, then it will be the obligation of USF & G to get somebody to come in and finish the project.

Weddle has a performance bond that amounts to the total project cost, Hartman noted.

She added, "This is a performance bond. Being able to do any substantial public works projects you must be bonded. So if a bonding company would have to actually go and perform on the bond, I would think that would make the bonding company very reluctant or other bonding companies to be willing to bond a project for a contractor."

Corey also pointed out, "Typically that is what happens. When a contractor defaults on a bond or a bond is called into issue on the project, it's very difficult for that contractor to get bonded again. It precludes them from being able to bond public works projects. We are a little perplexed at their action here."

The project manager said the performance bond is a protection for the county on a large multi-million dollar project like this.

"It protects the county to the point -- to finish this project it's only going to cost the county what is left in the contract. If it costs the bonding company more the bonding company loses that money and then they are free of course to seek whatever (legal) action they want to take," Corey explained.

Related to the building project, Hartman announced that a meeting is set up for this morning (Thursday) in Indianapolis with the Local Tax Control Board to consider the county's request for the issuance of an additional $4 million in bond anticipation notes (BANs) to provide the finances to finish the courthouse renovation project.

That board will then make a recommendation to the Department of Local Government Finance.

Once approval is received from the DLGF, the bonds can be issued on the public market, she said.