Contractor walks away from $15.9 million road contract
Construction on the 0.7-mile connector road through Southwestern Community College has come to a halt after the contractor working on it defaulted on its $15.9 million contract this week.
Devere Construction Company — a Michigan-based company responsible for four N.C. Department of Transportation projects in Jackson, Buncombe and Mecklenburg counties — stopped work on all four of its road projects Friday, Jan. 29, even beginning to pull its equipment off the sites. The DOT issued a letter giving them a deadline of Feb. 8 to get back to work — or else be considered in default of their contracts.
“Once they’re in default, the bonding procedure kicks in,” explained Steve Abbott, communications manager for the N.C. Department of Transportation. It will now be the responsibility of Liberty Mutual, Devere’s bonding company, to bid out the remaining work and get the project finished.
“We don’t pay any more for the project,” Abbott said. “The bonding company is on the hook to pay for the project.”
It’s unclear why Devere walked away from its contracts with DOT, all of which were more than half complete. At 86 percent finished, the Sylva project — intended to connect N.C. 116 and N.C. 107 through the SCC campus — was the furthest along of the four, so that default in particular has Jack Debnam, an NCDOT board member and former Jackson County Commission chairman, scratching his head.
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“We’ve been withholding 10 percent on it, so there’s some money sitting there,” he said. “Seems like they would have wanted to finish this job to have gotten their retainage.”
Debnam said there’s been no report that Devere has filed for bankruptcy. Its company website has no statement posted about changes in the company’s status, and calls to its headquarters in Michigan and to its office in Raleigh still go through. However, the number listed for its Asheville office is no longer in service, and voicemails to the Michigan and Raleigh offices — as well as an email requesting comment — went unreturned. But, Abbott said, that in itself isn’t too unusual.
“They’re not the friendliest,” he said.
DOT and Devere — a large company that builds everything from roads to hospitals and does design work too — have problems far preceding the default this winter. In 2014, the company was suspended from bidding on any new projects with the DOT, as they’d been consistently lax with meeting deadlines.
“They were behind on a number of projects, and that’s why they were not allowed to bid anymore in 2014,” Abbott said. The four on which Devere has now defaulted were those left in the pipeline before the suspension went into play. Work on the SCC project started in January 2013.
The default will set the timeline back for completion of the road, but not by as much as it would have had the default occurred in the summertime. Construction has been mostly at a standstill anyway, awaiting the return of warmer weather — asphalt, for example, can’t be poured unless the temperature is over 40 degrees — but it will still take some time for details to get sorted out with the bonding company and for Liberty Mutual to bid out the remaining parts of the projects to contractors who will complete them. A complicating factor can be the availability of contractors, who may already have full plates and not be able to start a new project right away.
As far as the SCC project goes, there are 0.2 miles left to construct, as well as a ramp onto N.C. 107. According to the contract now in default, the road was supposed to be traffic-ready by May 19, an extension from the original date of April 26. Now, that timeline will get pushed back just a little bit further.
“I think it will be the first of June when it will be open to traffic,” estimated Brian Burch, division construction engineer for the DOT. The entire project — including landscaping — won’t likely finish until August or September, he added.
And while the project always bore a hefty price tag — $29.6 million total, with $15.9 million of that for construction — it’s looking like the work is coming along on budget. So far, 92 percent of the total price tag and 86 percent of the construction contract has been spent, proportions consistent with the amount of work that’s actually been done.
“We’re right on target,” Burch said.
