District, construction company in dispute over additional costs

District, construction company in dispute over additional costs
The Carlsbad Unified School District is in dispute with McCarthy Building Companies, Inc. that claims the district owes them more than $800,000 in additional expenses for work done at Carlsbad High School. Photo by Rachel Stine

CARLSBAD — The Carlsbad Unified School District (CUSD) is calling claims that they owe a construction company more than $800,000 in additional costs for a high school expansion project unjustified. 

McCarthy Building Companies, Inc., a St. Louis-based company with $2.4 billion in annual revenues, is asserting that the district owes the company $837,410 in incurred costs not covered by the original $35,184,200 contract to construct Carlsbad High School’s new classroom complex and parking lot.

The project was completed in the fall of 2012 after more than a year-and-a-half of work to construct 11 new education buildings, a central plaza and a parking lot.

It was the last phase of the high school’s $87 million renovation project, which McCarthy started constructing in June 2008; the first two phases consisted of building temporary classrooms and a new stadium.

McCarthy listed such expenditures as $423,870 for a schedule delay, $106,389 to pay a drywall subcontractor and $28,572 for adjusting the height of a guardrail.

But the district claims that McCarthy has not justified these cost estimates or provided appropriate documentation of specific construction work despite multiple requests.

The CUSD is disputing McCarthy’s claims based on the observations, documents and cost estimates from Gafcon, the program manager that the district hired to oversee McCarthy and its subcontractors.

Based on Gafcon’s assessment, CUSD has stated that McCarthy owes the district $404, citing that the costs for work that was eliminated from the project and never completed is greater than the additional costs that are properly substantiated.

The district claims include that they are not solely responsible for the schedule delay and only owes $131,000, that all costs for drywall subcontractor were already paid, and that the guardrail adjustment was needed because of an initial construction error and as such is not the district’s financial responsibility.

“The District remains hopeful that resolution can be reached with McCarthy on the few outstanding change orders,” said CUSD Superintendent Suzette Lovely.

CUSD has already paid $1,722,652 in supplementary costs, which were approved in 30 separate change orders over the past several months for the project.

Lovely explained that an additional 5 to 10 percent of the original contracted amount in change order costs is typical for this type of project.

McCarthy Project Director Craig Swenson responded through a written statement saying, that, “Our team has been working closely with the District and program manager to respond to any questions and provide all requested documentation regarding final payment to McCarthy and the subcontractors who performed the work.”

Neither CUSD nor McCarthy representatives specified how long they have attempted to resolve the contested costs.

Because the district had been unable to reach an agreement on the remaining costs of the project with McCarthy, they unilaterally moved forward to close out the remaining costs with the district Board of Trustees.

At its March 6 meeting, the board sustained the district’s cost estimates.

Lovely said that the Carlsbad High School project is the first the district has worked with McCarthy.

She added that so far the district has been able to reach an agreement with construction company Balfour Beatty for all change orders from the construction of Sage Creek High School.

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  1. Really! says:

    Crazy Aunt with the checkbook! Can we take it away now? Change orders, how many change orders at Sage Creek? Change orders, over budget, tomatoes tomatos, can we please call the whole thing off! Please take the checkbook away!!!!!!

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