The owner of a construction company called Williston’s decision to terminate its contract "unbelievable" and said his company had done nothing wrong.
The City Commission voted on Aug. 9 to declare J.M. Marschuetz in default on its contract for the construction of taxiway A at Williston Basin International Airport. The commission also voted to move forward with negotiations to finish the taxiway project with the second lowest bidder for the work, Northern Improvement.
According to reports from City Administrator David Tuan, Airport Director Anthony Dudas and engineers Roger Leonard and Lee Underwood, JMMC had failed to complete enough work that would allow the taxiway to be completed by November.
Michael Marschuetz, president of JMMC, said that Williston had provided his company with a notice of default on July 30, and gave a deadline of Aug. 9 at noon to respond to the claims. Marschuetz said he provided the response on time, with the city receiving it at approximately 11:30 a.m. on Aug. 9. Tuan acknowledged at the commission meeting that they had received response from JMMC "moments ago."
Marschuetz said he was not made aware of the special meeting, and that information presented regarding the progress of his company's work was erroneous. Were he told about the meeting, he said, he would have made a point to be there to defend his company, especially with the fate of JMMC's contract on the line. He further added that he was told once his response was received, that a determination would be made in regards to the contract. He was not aware, he said, that the decision would be made immediately and at a special commission meeting.
Tuan noted that the commission meeting was open to the public, and advertised as required.
“Meeting the project deadline on Taxiway A impacts the sequencing of events on the entire XWA project.” Tuan said. “Unfortunately, with limited time and aging existing airport infrastructure at ISN, we must hold all of our contractors to a rigid schedule by expecting only the best performance on our project. The City Commission’s decision to terminate the contract with JMMC was not taken lightly, but speaks to the commitment to air service we have made to the FAA and the public.”
Marschuetz added that he did not find out about the contract termination until he saw news reports about it.
According to JMMC's response to the notice of default, Marschuetz said he was "taken by surprise" when the company received the notice.
"We thought we were working through all of the issues on the Project with Clint Knutson (senior engineer for Ulteig) and were close to reaching an acceptable solution," the response letter stated.
According to emails between Marschuetz and Knutson from July, Marschuetz broke down the costs associated with accelerating the work for taxiway A completion, a step he said was necessary due to delays in the project he claims stemmed from the city itself.
Tuan disputed that claim.
“JMMC’s inability to meet the project deadline was due to a lack of staff, equipment, materials and project management,” he said. “When asked what methods or plan would be enacted to meet the contract deadline, no detailed measure was provided and a demand for extra payment, upwards of a quarter million dollars, was made.”
The email exchange notes that due to labor and equipment costs, it would cost an estimated $276,650 to get the project back on schedule.
"We understand this type of money is not in the budget for this project." the email reads. "However, the delays we have been experiencing on site were out of the control of J.M. Marschuetz and KLE."
While no mention of specific costs was made at the commission meeting, Tuan stated that negotiations with Northern Improvement would begin soon, and it is the intent of the city to work with JMMC’s surety company/bond agent to ensure that any increased costs due to transferring the taxiway contract would be covered by JMMC’s performance bond.
Marschuetz said he was promised by the city that his company would receive a notice to proceed no later than Sept. 27, 2017. He said the notice to proceed was not given until Nov. 29, which Marschuetz said automatically put his company two months behind.
At the Aug. 9 special commission meeting, Dudas acknowledged that the notice to proceed was delayed due to "reviews of documents mostly related to disadvantaged business enterprise participation in the project." Dudas added that those reviews delayed the FAA grant award, which led to the delay in the notice to proceed.
Marschuetz explained that his company was already committed to completing the work on time, and that JMMC had already accelerated their work to meet the November deadline. He further asserted that the company was ahead of schedule at the time the contract was terminated.
In a letter to Charles Baker, engineer project manager for KLJ Architects, Marschuetz said that it was never his company's intention to complete the project in September 2019, but that the date was given in response to a request to provide a specific date when construction on taxiway A could be completed without an acceleration in work.
"I made it abundantly clear that we planned to finish the Project on-time, and yet the City apparently ignored all of the information JMMC submitted showing this," the letter stated. "JMMC never, at any point in time, planned to finish the Project in September of 2019....To reiterate, JMMC has been focused on finishing the Project this construction season, and is still capable of doing do."
An update on Williston Basin International Airport’s website from June stated that “June is proving to be another productive month at XWA. The runway and taxiway projects are
tracking right on schedule,” and as of Friday afternoon, Marschuetz said his crews had been working seven days a week, 14 hours a day to get back on schedule.
Marschuetz sent written responses to Klug, Dudas, city commissioners and project engineers in regards to the contract termination.
"We're asking them to reconsider this decision, because they're misinformed." he said.
He added that the issue has caused damage to the company's reputation, and said as much in letters to Klug and others involved in the contract dispute.
"JMMC has never been defaulted from a project before. These actions are unbelievable, and reek of bad faith on the part of the City," one letter stated. "We will not accept this termination lying down, and will not allow our reputation be dragged through the mud when we have done absolutely nothing wrong."