News: PVPHS Construction Update
September 2, 2011
With great disappointment, the District announces that Great West Contractors Inc. (Great West), contractor responsible for the construction of the two story classroom building and new gymnasium at Palos Verdes Peninsula High School, has shutdown its operations as of Friday, September 2, 2011 due to financial difficulties. Great West will be terminated from their construction contract effective September 7, 2011. This decision comes at a time when the District had just begun to regain confidence in the contractor’s ability to complete construction on both projects to a satisfactory level, albeit somewhat delayed. At this time, the classroom building is 75-80% complete and the gymnasium is nearly 50% complete.
As stated in a previous press release, the District realizes the financial difficulties of Great West are a function of the economy and of Great West’s subcontractors experiencing financial difficulties. However, the District itself does not have financial difficulties with regard to this project and has complied with all public requirements for entering into contracts and ensuring that all contract funds are available prior to entering into contractual commitments consistent with the anti-deficiency requirements placed on school districts. Specifically, District Policy and Education Code section 35200 prohibit a debt of contract without budgeting for the incurred expense. Finally, the District has sufficient bond and construction funds to complete the projects at Palos Verdes Peninsula High and all future projects on the approved list.
Consistent with the requirements of Public Contract Code, the District has secured payment and performance bonds. A payment bond is a guarantee from a California Admitted Surety that all vendors, suppliers, and workmen associated with the project will be paid for their work. A performance bond is a guarantee that the contractor will complete the project or the bonding company will become responsible to complete the project. The District expects to work collaboratively with the bonding company to resume construction of both projects as soon as possible.
As background information, in March of 2010, the District went through the public bid process and entered into a contract with the low bidder, Great West Contractors, to build new classrooms and a gymnasium at Palos Verdes Peninsula High School. Great West Contractors has been working on the project, but has suffered from a number of setbacks that have caused project related delays. Specifically, Great West’s grading contractor refused to honor the proposed price on which Great West relied when developing a bid for the District. In addition, Great West’s framing contractor had severe financial troubles and quit the job in late June 2011. Up until this point, the District has had a good working relationship with Great West, the contractor responsible for the successful construction project at the Malaga Cove School site.
Please contact Pearl Iizuka, Deputy Superintendent of Business Services, at (310) 378-9966, Ext. 418 if you have any questions about District construction projects.
