Dive Brief:
- The Central Texas Regional Mobility Authority (RMA) and CH2M have reportedly reached a deal over costs that will allow the contractor to complete work on an 11.2-mile Austin highway toll lane project by November, according to the Austin American-Statesman.
- The RMA and CH2M have agreed on an amendment to the original contract, which includes a recovery schedule and other modifications. The amendment also includes a possible reduction in late fees from $73,500 a day to $43,433 if CH2M hits certain project milestones, the American-Statesman reported.
- In December, the RMA served CH2M with a notice of default, which said the contractor was three months behind on its $136 million contract for the addition of two toll lanes. The authority gave CH2M 60 days to cure the default by submitting a detailed project completion schedule and putting more workers on the project, although CH2M had previously told the authority that unexpected job conditions and labor shortages had caused the delays.
Dive Insight:
CH2M maintains that unexpected hard rock, relocation of a water line, weather delays, labor shortages and other design changes are responsible for the project delays and are asking for more than $46 million to cover the extra costs, the American-Statesman reported.
These issues, as well as whether or not to move the contractual completion date, are expected to be decided by a dispute resolution board by April 30. If the board approves a new completion date, it could reduce the amount of late fees CH2M pays under the contract.
Under the original contract, the project was supposed to be complete by Sept. 17, 2015, but both CH2M and the RMA agreed to move the date to Dec. 27, 2015, meaning that late penalties didn’t start to accrue until that date.
Mike Heiligenstein, RMA executive director, told the American-Statesman that the authority decided to be flexible on the late fee issue and that throwing CH2M off the job only would have caused further delays. "We feel this is a better deal than to continue fighting over all the minutiae," Heiligenstein told the American-Statesman. "And once CH2M realized the extent of what was going on, the very top of levels of the company stepped up."
The problem of skilled labor shortages, which CH2M cited as one of the reasons behind the slowdown, has been an ongoing concern for the construction industry. In a December report, the Associated Builders and Contractors said companies of every size — even giants like CH2M — continue to be impacted by the skilled labor shortage.