Construction firm sues county over Los Osos sewer work

nwilson@thetribunenews.comMarch 19, 2014 

A "road closed" sign on Pismo Avenue as work on the installation of sewer lines continues in Los Osos in January.


A Bay Area construction firm contracted to work on a portion of the Los Osos sewer project has sued the county for breach of contract, demanding $15 million in damages.

But County Counsel Rita Neal said Wednesday, “We believe the complaint is premature. We haven’t issued a notice of a completed contract.”

Neal also said the claims are “exaggerated.”

ARB Inc. is one of two companies contracted to install the sewer pipeline, which is mostly finished and expected to be completed in July.

W.A. Rasic Construction is the other contractor hired to install pipelines.

ARB filed its lawsuit in San Luis Obispo Superior Court on Feb. 26, alleging breach of contract for failing to pay for unanticipated duties. The company believes it should be paid for change orders as work progresses.

The county contends that work in question contractually should be addressed after the work is done.

The complaint alleges the county has refused “change orders” that detail how the scope of work has altered and refused to investigate differing “conditions and plan errors.”

Among the complaints, ARB contends that the county should have compensated the Bay Area-based company for extra time and costs to work around obstructing utility lines.

ARB’s complaint also states the county failed to abide by terms for diggings of more than four feet deep.

Neal said the county is planning a formal response to the lawsuit by the end of March.

Neal acknowledged that ARB has filed work order changes but said procedures are in place for resolving disagreements between a contractor and project owner. That process still needs to play out, she said.

“That’s when it all gets sorted out — at the end of the contract,” Neal said.

ARB entered into a $26 million contract with the county on June 19, 2012, that was subject to budgetary increases and deductions for changes in the work, the lawsuit states.

“The county has attempted to circumvent its various statutory duties,” the lawsuit, filed by the Costa Mesa firm Rutan & Tucker states. Attorneys for the firm did not return phone calls Wednesday.

Claims made in a lawsuit only give one side of the case.

The $183 million sewer project, which includes construction of a wastewater treatment plant, is expected to be completed in 2016.

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