The Kearny Board of Education has lost – bigtime – the first of two important arbitration cases initiated by the contractor it hired for a high school renovation job but ended up “terminating for convenience” in February 2013.
Until the board sorts out the financial impact of both cases – results from the second are expected soon – it’s unlikely that it will be ready to award a new contract to complete the lagging project.
And, if the board concludes it lacks sufficient funds from the money being provided by the Federal Aviation Administration, Port Authority of N.Y. & N.J. and state Department of Education for the work, it could end up asking taxpayers to come up with the balance via referendum.
Meanwhile, the board is reeling from the three-member arbitration panel’s award of $2,975,599 in “reasonable overhead and lost profits, based on evidence submitted by claimant” to Brockwell & Carrington Contractors Inc. of Towaco in connection with the Aircraft Noise Abatement contract for Kearny High.
A second contract was awarded to B&C for façade/exterior construction work and a separate arbitration dealt with a claim that the contractor filed on that job.
According to the panel’s ruling, payment on the noise abatement claim must be made within 30 days from the date of the award, which was signed by the panel on Feb. 17, 2016.
Additionally, arbitrators Richard H. Woods, Dennis A. Estis and Sheryl Mintz Goski ruled that the board must pay the contractor’s legal fees of $40,510 plus $43,611 in arbitration fees and expenses.
The board will also have to pay bills from its own legal team and consultants who testified during the arbitration.
But Kearny Schools Superintendent Patricia Blood said the ruling is not the end of the matter. “The Board of Education disagrees with the ruling and is appealing the decision. We are also awaiting the Facade Arbitration decision, and we expect that it will be in our favor,” she told The Observer last week.
During the lengthy arbitration hearings, Florham Park attorney Robert T. Lawless represented the contractor and Joseph J. Hocking, a construction attorney who practices in Montclair, defended the board.
In their terse three-page ruling, the arbitrators did not explain how they came to their conclusion but Michael Dassatti, president of Brockwell & Carrington, said the panel “utilized our way of calculating” what was owed the contractor.
“We had proper backup and documentation,” he said.
Dassatti said that arbitrators heard “under 10” days of testimony for the abatement matter but labored through 35 hearing dates for the façade issue. Typically, he said, each hearing session took “seven to eight” hours.
Reflecting on the award, Dassatti said that before his firm was taken off the job, he did everything he could to get the board’s representatives to work with him to resolve disputed issues but that he was thwarted at every turn.
And, he said, even during the arbitration when some sort of compromise might have been worked out, that effort was rejected out of hand by the board’s representative. “It’s a very sad situation,” he said. “As we speak right now, the job would be complete already. Now the best case scenario as to when the school will be done is what, 2018?”
Former Kearny Interim Superintendent Ron Bolandi, who was called as a witness by B&C, told The Observer that he opposed a recommendation by the project’s management firm to “terminate [B&C] for convenience” because “when you do that, you’re stuck rebidding the project and the cost could escalate,” plus “the contractor would have a lawsuit against you. For me, [advising against terminating for convenience] was a no-brainer.”
Bolandi said that, at the time in December 2012, “[board operations director] Mark [Bruscino] and I were starting to meet with Dassatti. I think we could have worked it out. I feel bad for the taxpayers of Kearny and for the current board and Patte [Blood] who got stuck with it.”