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Contra Costa County has fired the construction company building a 240-bed addition to the aging juvenile hall in Martinez, and is suing the Novato builder for alleged delays and shoddy work. Arntz Builders has led to “inexcusable delays” as well as “deficient, defective, rejected and non-conforming work,” according to the $1 million lawsuit, filed Tuesday in Contra Costa County Superior Court. Attorneys for the construction company, however, say that it’s being scapegoated for county mismanagement of the project, which may cost Contra Costa $4.4 million in state funding. The ugly dispute has put the $36 million project, now eight months behind schedule, on hold. In March 2001, the county awarded Arntz a $26.8 million contract to build a 240-bed addition to the juvenile hall at 202 Glacier Drive. The current facility, built in the 1950s, was intended to house less dangerous offenders than many of the youths detained today. The two-story, 120,000-square-foot addition increases capacity and amenities at the hall. Arntz planned to complete the project by June 16 of last year. As the project wore on, there was a series of problems, alleges County Counsel Silvano Marchesi. He says there were delays, defective masonry and poor fireproofing work. Metal debris, as well as water pressure and hydraulic problems, hamstrung the sprinkler system. The county wrote up a laundry list of problems in the fall and twice asked Arntz to fix them. Arntz says in a claim filed against the county that it worked to fix the problems, but the county decided to fire the company anyway. As the dispute escalated, the county withheld payments from Arntz, which it has paid $20.6 million so far, county lawyers say. The Contra Costa County Board of Supervisors fired Arntz Builders on Nov. 18. The county estimates that Arntz should pay more than $1 million in damages because the builder’s contract states that Arntz must pay $5,000 for each day the project is behind schedule. Arntz “was given repeated opportunities and they repeatedly failed,” said Jeffrey Sykes, a Farella Braun & Martel attorney who is the county’s outside counsel on the case. Arntz tells a different story. In the claim filed Dec. 17 with the county, Arntz argues, “Delays in completion of the project are directly attributable to the county’s deficient plans specifications and mismanagement of the project.” After months of working together to resolve the problems, the county went on the offensive, said Richard Norris, an Archer Norris name partner who represents Arntz along with Bell, Rosenberg & Hughes name partner Roger Hughes. “All of the sudden the county got very agitated with Arntz’s performance,” Morris said. “It was a gotcha environment out there to get Arntz.” Norris theorized that the county feud with Arntz was a way for the county construction managers to conceal missteps that delayed the project. Construction delays for other county construction projects, including two Head Start facilities, has caused the county to lose federal funding in the past, Norris said. “Those are apples and oranges,” responded Barton Gilbert, Contra Costa County’s general services director. The county was given a pool of $12 million in federal money for several projects, but had to give back $1.8 million of it because it could not find suitable locations for the two Head Start programs, Gilbert said. That’s a different situation than the juvenile hall addition, which may lose money because construction wasn’t completed on time, Gilbert said. The county hired a private company, URS Corp., to manage the juvenile hall construction, he added. Norris said Arntz has further proof that the county’s claims are overblown. Travelers Casualty & Surety Co., which issued the performance bond for the project, did an independent review of the county’s complaints and sided with Arntz. In a Dec. 15 letter, a Travelers claim manager concluded, “Based on the information we have received and reviewed, the propriety of the Arntz termination is highly suspect. The county would be able to mitigate its losses by allowing Arntz to complete the project.” Sykes noted that Travelers has agreed to step in and complete the project since Arntz was fired. “The surety would not agree to take over the project and complete it if they thought the termination was wrongful,” Sykes said. This isn’t the first time Arntz has run into trouble building a juvenile hall. Back in 1999, Santa Clara County filed a claim against Arntz when rooms at its hall were built too small, drastically reducing the facility’s capacity. The county and Arntz settled the dispute, and the builder fixed the problem. The county also chose the company to build the second phase of the project and has used Arntz on other projects, said Kevin Carruth, Santa Clara County’s director of general services. Firing contactors is not common and can lead to years of litigation, Carruth said in an interview before the lawsuit was filed. “It’s something that I suppose Contra Costa County would not do lightly,” he said.

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