Alan Dorfmeir and Patrick Mauldin in happier times.

A unit of surety St. Paul Travelers has taken over the projects of general contractor Mauldin-Dorfmeier Construction, which last month filed for protection from its creditors in federal court in its home city of Fresno and is liquidating its assets.

Disputes on two big public works projects cut off the contractor's cash flow, says Peter N. Zeitler, the contractor's attorney. "It was just the luck of the draw that they had two big ones at the same time," he claims. "They couldn’t get their surety or the creditors to work with them."

Kevin Lybeck, a vice president of national accounts at St. Paul Travelers, declines to comment because of the lawsuits over Mauldin-Dorfmeier's projects. When deciding whether to replace a contractor or allow it to complete the job with oversight, "The second option is risky and not chosen very often."

Co-owners Alan Dorfmeier and Patrick Mauldin started the company as a subcontractor in 1983. Their company's website proclaims boldly, "Over A Decade of Intense Enthusiasm." Mauldin-Dorfmeier operated nonunion and built many major projects in Fresno, including some prominent public works. It also provided design-build services.

In recent years Mauldin-Dorfmeier had been the target of a union corporate campaign. But in the end it was bad projects that killed the company.

Dorfmeier says the trouble started three years ago with the $42-million Fresno Yosemite International Airport concourse expansion. Mauldin's contract provided for liquidated damages of $3,500 a day. A grand jury report concluded that problems with design, scheduling, staffing and steel fabrication delayed the project. The city of Fresno sued the contractor for $1 million and withheld another $2 million, mostly because of delays. Mauldin-Dorfmeier countersued for $10 million, citing breach of contract, mismanagement and defective plans. The dispute is in mediation. "That got us into a weak position," says Dorfmeier.

Then the local fire marshal delayed work for five months at a $31-million University of California at Merced student housing and dining facility, which Mauldin-Dorfmeier was constructing under a design-build contract. "We carried the project for four months without being paid, but the responsibility was just overwhelming," Dorfmeier claims. On December 17, a unit of Minneapolis-based St. Paul Travelers began taking the payments and Mauldin-Dorfmeier was left without cash to pay its bills.

What went wrong on the Merced project? There were big problems with the bridge documents, claims Russell F. Taylor, partner in the Taylor Group, an architectural firm. "Don’t do a design-build project for the UC system. They have it set up to fail."
The University of California sued Mauldin-Dorfmeier for $2.5 million for delays but a spokeswoman now says the building is scheduled to open in June. Mauldin-Dorfmeier claimed that the university changed the scope of the project and owed them $3.5 million on the base contract and an additional $4 million in change orders.

"Public projects were our background," says a tired-sounding Dorfmeier from the offices of what was left of his company. Only six out of what at one time were 300 employees were left preparing for liquidation last month. "Public projects have changed over the years," he says. "The paperwork demands and risk of litigation have escalated many orders of magnitude."