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Council Asks Who Will Pay Bill For Over-Schedule Project

Extra engineering fees add up to about $78K

The upgrade of Mahwah’s Ford Well Field likely will not be done until the middle of March 2012 at the earliest, according to an estimate made by township utility engineer Malcolm Pirnie at last week’s town council meeting.

If the estimation is correct, the project, which will upgrade the water wells on the site, will finish up several months behind schedule. According to representatives from Malcolm Pirnie, the contractor working on the upgrade, APS Contracting, requested a 100-day time extension. “It [should be] more like a month and a half of a justified time extension,” Pirnie said.

The increased amount of time may lead to a bigger bill for the township. Although no more money will go to the contractor, the increased time spent on the project will lead to about $78,000 in additional fees from Malcolm Pirnie.

The council expressed concern at its last meeting about who will ultimately be responsible to cover the costs.

“Who gets the bill?” Council Vice President Harry Williams asked at the meeting. “The [contactor] can go over all he wants as long as we don’t get the bill.”

According to a “very rough” estimate by Malcolm Pirnie, the additional costs would be covered by a 50-50 split, with half being paid by the township, and half being paid by the contractor. Since responsibility for the payment lies with the group who caused the delayed progress of the project, Pirnie said the responsibility for the payment could be “an area of dispute between the township and the contractor.” According to the council, the township would only be responsible to cover costs associated with extra time spent on the project that was not the contractor’s fault. Any extended time determined to be the fault of the contractor would have to be paid by APS.

So, costs associated with fixing errors would fall on the contractor, but those associated with changes in the plan, or a weather delay, would go to the township, because those are “legitimate” reasons for the contractor going over time, Pirnie said.

The board has also started to stop payments to the contractor in order to send a message that it is not happy with the delayed progress on the project.

“The amount we may owe [Malcolm Pirnie] is higher than it was last month. This is not getting better it is only getting worse,” Council President John Roth said. “This is very upsetting [and] I have a gigantic concern that this project is not being managed properly.”

After some discussion about what exactly the engineer’s role is in the project, township Business Administrator Brian Campion explained that the company does not manage the contractor, it just administers the contract, and maintains contact with the contractor. According to Campion, the town council maintains control over the project by exercising its ability to withhold payment if it is unhappy with the progress, “which we have started to do.”

Representatives from Malcolm Pirnie said they were “not surprised” that the contractor went over time on this, because “it is a very complex project.” However, “some of the fault does” lie with the contractor, they said.

For the next council meeting, Roth requested a “complete proposal” about how long, and how much money, it is going to take to complete the project, and how much of the bill Mahwah is responsible to pay. “We need to find some accountability here,” he said.

The board acknowledged that the dispute may lead to litigation in the future.

Bob Lockwood December 08, 2011 at 06:38 PM
Malcolm Pirnie said that their "back-of-the-envelope" guess was an additional $78K for 'over-run' management. There are a couple problems with this. (1) They were supposed to come back with a firm plan on 12-1-2011. This "back-of-the-envelope" guess does not seem like a firm plan. Malcolm Pirnie has been promising a firm plan ever since 10-13-2011. We have yet to see a firm plan. Does any one know how to use "MS-Project"? At $200/hr I would hope that someone over there is tracking this effort with a contemporary project management tool. (2) Malcolm Pirnie has not been forth coming during this project. It was unclear during the Board dialog what Malcolm Pirnie's role really is for their $353,600 share of this $3,717,560 project. None-the-less it seems like they are clearly responsible for keeping the Town Administration up-to-date with progress, issues and remedies. Upon close examination of their status reports and their lack of attendance at town meetings they have not been forth coming with identifying the impact of the problems on this project.

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