Attorneys are now involved in the dispute over fines levied by the Indiana Department of Transportation (INDOT) for deadlines missed by Sierra Bravo Inc. of Sesser, IL, on the 641 bypass around Terre Haute.
Sierra Bravo continues to incur fines of $3,000 per day for failing to meet intermediate completion goals, and an additional $700 per day levied by the state for failure to meet the original contract completion date of Oct. 1, 2004. The total has surpassed $670,000 and the bill will continue to climb until the work is completed.
The Project
The project, in Vigo County just south of Terre Haute, begins at the proposed interchange of SR 641 bypass with Canal Road and proceeds up the Canal Road and Wolf Road corridor, ending at Margaret Avenue.
The result of recommendations made in the 1990 Greater Terre Haute Long Range Transportation Plan to accommodate suburban north-south traffic, the bypass is designed to ease congestion in the heavily traveled Terre Haute area. As a spokesman for Sierra Bravo said, “From U.S. 41 to Vincennes, it’s bumper to bumper.”
Portions of the new roadway will be built on new alignment, but the majority will be on present or near-present alignment. The proposed roadway will consist of four-lane undivided highway with a left-turn lane provided at intersections, where warranted. A rural section with shoulders is proposed from the southern end of the project to Davis Avenue. An urban section with curb and gutter will extend north and terminate at I-70. An undivided section is necessary to minimize right-of-way impact.
A 190-ft. bridge is required for grade separation over the CSXT Railroad due to high train volume (more than 25 per day) and estimated high traffic volume at the south end of the project. The bridge will cross over the railroad 500 ft. south of the present Canal Road at-grade crossing. The alignment will allow for a smaller skew angle crossing the railroad. An additional bridge of 150 ft. will replace the existing bridge over the Thompson Ditch at Jessica Drive.
The Problem
In 2003 Sierra Bravo was awarded the $12.2 million grading contract for the first phase of the bypass, which covers a mile-and-a-half section about four miles south of the city. They began work in June of that year, but immediately faced a barrage of problems.
Rain came in September, delaying work, according to a Sierra Bravo spokesperson who wishes to remain anonymous.
“It rained from September ’03 into July ’04,” he stated. “INDOT refuses to admit that we were impacted by weather.”
Citing heavy rains, Neal Luckett, vice president of Sierra Bravo, complained to the Tribune-Star that the fines are unwarranted.
“For whatever reason, the state thinks we should not be impacted by that weather,” he said. “This is an ongoing situation –– one we think is not fair.”
Jessica Stevens, communications specialist and spokesperson for INDOT, contends that the department did take into consideration the heavy rain.
“We adjusted completion dates, moving the original October 2004 deadline to the end of May 2005,” she said. “The intermediate deadline of October 15, 2003 was moved.”
In addition, time for holidays and winter weather was subtracted.
“They were not charged from December 1 to March 31,” she said.
In all, 114 days were added to allow for weather.
According to the Sierra Bravo source, INDOT did agree to waive the company’s culpability for initial delays due to problematic utility relocations, railroad right-to-enter agreements, property right-of-way acquisitions and soil problems.
“I’ll be honest: we had some problems,” said Stevens. “But we solved our utility relocation on June 1, 2003, and our right-of-way acquisition was completed by July 13, 2003.”
So, while INDOT was willing to concede that they were to blame for impeding the start of work, they held firm on what Sierra Bravo continues to insist are weather-related delays.
Stevens, however, believes the issue is with the fill, not the weather.
“Sierra Bravo is an Illinois contractor that isn’t familiar with INDOT standards. They chose to use a local borrow that was weather-affected,” she said. “It wouldn’t dry out after a rain. We can allow for rain, but we won’t allow added time for borrow to dry out. The other bidders chose remote borrows, which made their bids higher. Sierra Bravo had the lowest bid so they won, but they didn’t make a wise decision about the borrow. If they had, their bid would have been comparable with the others and they might not have got the job.”
The Sierra Bravo spokesperson didn’t comment about the quality of the borrow, but said they have moved over a million yards of dirt in 6 months.
“We’ve placed borrow dirt in two pits on the east side and built 40-50 fills. We have a ton of big equipment on this job –– some of the biggest earthmoving equipment out there –– including 641 scrapers, 651 scrapers and dozers. We’ve had 30-40 guys working long hours since May.”
The Consequences
Sierra Bravo expects to start cutting back on the number of workers as the project progresses and the working area shrinks, but promises to meet its targeted completion date of September 1.
“We’ve never stopped working on the project, and we’re pursuing its completion as fast as humanly possible,” Luckett told reporters.
The Sierra Bravo source added, “Since August 2004 we’ve had good weather. We’re catching up. It will be done this year.”
Some future work has been delayed because of this situation, Stevens indicated, and because of the government’s reprioritization of road projects, she’s not sure of new timelines.
In order to expedite Sierra Bravo’s contract on the bypass, she explained that work has been removed from it, such as the paving of a new access road to Ivy State Tech College off Jessica Drive, which will be incorporated into other contracts. Stevens hastily added that Sierra Bravo will be reimbursed for anything they purchased for that part of the work; everything will be used.
The next two sections of the project have to wait for Jessica Drive to be completed. Bid letting has been postponed until late July or August.
Even so, Stevens predicts that Phase 2A (connecting Jessica Drive to the college campus) will be completed this year. Phase 2B, for grading and bridge construction, is scheduled to be let to bid in November and is expected to take two years to complete. Stevens said some of that work can be started in the winter.
Other target dates include paving between U.S. 41 and Feree Road in November 2007, which should take about a year. Grading from Feree Road to Riley Road is scheduled for bid letting in October 2008, and should also take a year to complete. Paving between Feree Road and Riley Road is scheduled for bid letting in October 2009, and grading between Riley Road and I-70 is scheduled for bid letting in October 2011. The final paving between Riley Road and the I-70 interchange is schedule to let in October 2013. Under the current schedules, the bypass is slated to open in the autumn of 2014.
Hard Feelings
According to the Tribune-Star, Luckett blames the new government.
“With this new administration in charge and all the pressure being put on INDOT, nobody is willing to give up anything for fear that they could lose their job or fear it would be perceived as some sort of kickback,” said Luckett. “Unfortunately, this is putting Sierra Bravo in a considerable financial disposition, but it is something [INDOT] will have to deal with.”
It’s not the first time INDOT has had to deal with a situation like this, although it is rare. One Indiana TV news station reported that another contractor is more than a year behind schedule, and blaming INDOT for causing delays. The contractor has reportedly filed suit for $3 million, part of which is an attempt to recover assessed fines.
Stevens said the only other company INDOT has fined within recent memory is Gale Shore Company for extended delays on work at I-465 and Michigan Road, and that the dispute is currently in litigation. But, she added, it “doesn’t happen very often.” Typically, contractors beat their deadlines and collect incentive bonuses.
Sierra Bravo won’t collect any bonuses or scheduled payments to cover wages and expenses. The anonymous Sierra Bravo source said INDOT is holding approximately $700,000 for liquidated damages –– money the source believes it shouldn’t have been allowed to keep.
“It’s hard when a company is closing down and has no other projects to cover our costs.”
One of the company’s minority stock holders purchased Sierra Bravo with the intention of shutting it down and retiring last year. However, the source said, the company can’t close up shop until this project is done.
The Sierra Bravo source said they’ve met with the new commissioner to begin negotiations, but everyone is afraid to make a decision. And so, it remains for the attorneys to settle.
Luckett told reporters INDOT is waiting for Sierra Bravo to provide “good documentation and a well-prepared claim on the work we have completed, and we are doing that.”
But he remains bitter about the withheld money. “They shouldn’t have been allowed to keep it.”
Stevens recognized the animosity, but said, “We just want to get [the project] finished. We don’t want to bad-mouth anyone.” CEG
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