UPDATE: April 24, 2019: The surety bondholders responsible for finding replacement contractors for the Florida DOT work on which Astaldi Construction Corp. voluntarily defaulted earlier this month have handed over the reins to two of those projects — the $7.6 million Halls River Road Bridge project in Homosassa Springs and the $50 million widening of US 301 in Hillsborough County — to St. Augustine, Florida-based Watson Civil Construction.
Watson has performed other work for the FDOT but made the news last year when one of its employees was arrested for allegedly embezzling $200,000 from the company across a two-year period, News 4 Jax reported.
The FDOT has not yet announced whether the surety companies with bonds on Section 7A of the $1.6 billion Wekiva Parkway in Seminole County and the widening of the Beachline in Orange County have selected new contractors to take over.
- The Florida DOT announced earlier this month that Astaldi Construction Corp. has voluntarily defaulted on four state highway projects (details here, here and here). The FDOT said that Astaldi is working with the surety companies that issued payment and performance bonds for the projects to make sure subcontractors are paid and that the department and sureties will replace Astaldi with other qualified contractors as soon as possible.
- Florida projects that Astaldi had partial or full contracts for include the $7.6 million Halls River Road Bridge replacement in Homosassa Springs; Section 7A of the $1.6 billion Wekiva Parkway project in Seminole County; widening of the Beachline in Orange County and the $50 million widening of US 301 in Hillsborough County.
- The FDOT said it is working to make sure that there is minimal impact to the timeline for each project. Astaldi Construction is a division of Italian company Astaldi Group, which filed for bankruptcy protection in October 2018, according to Seeking Alpha.
The FDOT, according to Engineering News-Record, will request bids from Lane Construction Corp. and Superior Construction Co. Southeast for the Wekiva Parkway project. Both companies are working nearby and were also-rans in the original bid process for the work Astaldi won. In 2018, Lane, a subsidiary of Italian firm Salini Impregilo, won a $253 million design-build contract for another section of the Wekiva Parkway, and Superior is working on a $234 million piece.
Astaldi, along with Obrascón Huarte Lain USA, is also part of OC 405 Partners, which is working on the $1.9 billion expansion of Interstate 405 in Orange County, California. So far, there has been no indication that the Florida default has affected this or any other of the company’s U.S. projects.
OC 405 has a $1.2 billion design-build contract for the project, the first for a California transportation project and the largest in county history. The joint venture is adding regular lanes and tolled express lanes to the existing highway.
Owners, particularly public entities, often require a contractor provide payment and performance bonds in order to ensure the work will be completed and all the bills paid. But these guarantees don’t work like business insurance, as any contractor that regularly provides bonds knows. If a bonding company must step in, the original contractor is still on the hook for any extra project costs. And, many times, principals of the company are liable for those extra costs as well.