In some ways, you could term this a pre-construction dispute in which the parties managed to snuff out the legal brushfire before it became an inferno.
Instead of fighting it out in court, the Washington State Convention Center in Seattle and the joint venture of Skanska and Hunt Construction Group (Skanska-Hunt) agreed to “amicably” resolve their disagreement over the district’s termination for convenience in March of the joint venture’s prime contract on a $1.6-billion addition.
Construction work had not yet begun, but there had been eight months of pre-construction services as the schematic design took shape during a general contractor/construction manager project delivery system.
The project was being built under an alternative project delivery system authorized by state law and called general contractor/construction manager.
Skanska-Hunt had sought an injunction in state court in Seattle soon after the termination to block the district from restarting the selection process for a new general contractor/construction manager. The lawsuit claimed doing so would violate the joint venture’s rights under the alternative project delivery law that permitted the GC/CM process.
Frank Finneran, chairman of the Washington State Convention Center Facilities District, said the district terminated Skanska-Hunt because after eight months of pre-construction services by the joint venture as design progressed, the facilities district believed the price was rising too high.
“Design and budget issues led us to conclude that we would not be able to negotiate a satisfactory maximum allowable construction cost for the project,” he said.
As Skanska-Hunt performed its services during the pre-construction process, the district “came to realize that taking a step back to re-evaluate aspects of the schematic design would benefit the project.”
The district is now free to proceed with the GC/CM process with others or with another contracting process.
“We, too, are pleased to resolve this matter amicably and in a manner which we believe recognizes the valuable services our team provided over the past nine months,” said Skanska Executive Vice President and General Manager Chris Toher.
The agreement came about 10 days after state court judge Beth Andrus denied Skanska-Hunt’s motion to be reinstated under the pre-construction service agreement or as GC/CM on the project and upheld the motion to stop the district from issuing a new request for qualifications to start the selection process again.
A key point in the decision, Andrus wrote, was Skanska-Hunt’s argument that it could be forced to expend resources “competing anew for a GC/CM project it had already won when its cost estimates and pricing and subcontractors “have already been revealed to the competition.”
That possibility of “actual and substantial competitive injury,” was key, Andrus wrote.
On a parcel near the existing convention center, the district envisioned a bigger building. The project consist of 300,000 sq ft of exhibition space, 135,000 sq ft of meeting rooms, about 55,000 sq feet of ball rooms and kitchen facilities, 1.2 million sq ft of gross area and about 1,300 parking stalls.
When architects completed schematic design last November, Skanska-Hunt said in a court pleading, the project’s anticipated construction cost came in at $830 million.
The district board met on March 4 to discuss termination and issued a statement stating that it had “worked with the contractor for more than six months and determined that they are not the right fit for this project,” according to an executive of Pine Street Group LLC, the project’s development manager.
The plan, said the executive, was to extend the schematic design process and then “restart the contractor selection process.”
It is unclear if that plan or something like it will be followed now.