County denies allegations leveled by contractor in Los Osos sewer project

nwilson@thetribunenews.comApril 12, 2014 

File photo of workers installing sewer lines in the Baywood neighborhood of Los Osos in January.


San Luis Obispo County has formally denied the allegations made in a lawsuit recently filed by a construction company helping to build the Los Osos sewer.

The county has fired back with a cross-complaint against ARB, the construction company that filed a lawsuit Feb. 26 claiming breach of contract and demanding $15 million.

ARB claims the county didn’t compensate the company for unanticipated duties cited in change orders that ARB submitted as the work progressed. ARB contends it wasn’t compensated for extra time and costs in working around obstructing utility lines during the installation of the sewer pipeline.

In its response and cross-complaint, filed April 1 in San Luis Obispo Superior Court, the county argued that ARB failed to follow the procedure set out in its contract, to notify the county of any potential claims or actual claims.

“(ARB) did not provide the initial notice of potential claim, a supplemental notice of claim, and a notice of final claim,” county attorney David Ginn stated in his legal response.

According to the county’s cross-complaint, the contract requires “notice” of claims that would have included information on the grounds for cost adjustment; provisions that provide a basis for the claim; an itemized breakdown of individual costs and how each estimate was determined. The county then would have the opportunity to respond to those claims, and assess the costs, before a lawsuit may be filed.

ARB filed a “notice of claim” to the San Luis Obispo County clerk-recorder but that was improper because the county hadn’t had a chance to conclude its noticing process.

Among the complaints, ARB alleges the county refused change orders that detail how the scope of work has been altered and refused to investigate differing “conditions and plan errors.” The company also alleges that the county failed to abide by terms for digging more than 4 feet deep.

“The County has refused to approve virtually every change order submitted by the plaintiff, refused to investigate and acknowledge the existence of irrefutable and documented differing conditions and plan orders, demanded that Plaintiff proceed with extra work without compensation, and refused to comply with governing statutory and legal requirements,” the initial lawsuit filing stated.

ARB is one of two companies contracted to install the sewer pipeline, which is expected to be completed in July. The company received an initial contract price of $26 million to conduct its work.


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