September 06, 2012The construction of McNair Elementary School at 4603 Yanceyville Road fell behind schedule at least partly because Guilford County Schools did not properly monitor the project, according to one subcontractor on whom the school system has blamed the delay.
Jesse Arambula, the head of Divine Electric Co. of Charlotte, the subcontractor in question, said the school system's project managers did not respond quickly enough to reports that subcontractors were not being paid and that the construction schedule was slipping.
"I think some of the people from the schools just had a lack of experience," Arambula said. "I don't know how else to explain it. If you've been in construction, you just know you can't go from 50 percent done to 100 percent done in a few months. Once the schools started getting reports that subs weren't being paid and things were falling behind schedule, they should have been more proactive."
Problems with the general contractor, Farley Associates Inc. of Indian Land, South Carolina, not paying the subcontractors working on McNair Elementary School started shortly after construction began – according to Farley and another major subcontractor – and were reported to the school system.
When the Guilford County Schools Facilities Department administrators reported to the Guilford County Board of Education in July that the construction of McNair was behind schedule, they attributed it to an electrical subcontractor who had walked off the job – as if the electrical company was responsible for throwing the whole project off deadline.
Not so, according to Arambula.
Arambula said his company stopped work at McNair because it had not been paid in months, despite the fact that Guilford County Schools had regularly paid Farley Associates.
"I have not been paid for any of the work we did after April 15," Arambula said. "We stopped working. We couldn't keep going."
Arty Bolick, with Brooks, Pierce, McLendon, Humphrey & Leonard, who represents the school board on construction matters, on August 16 wrote the bonding company for Farley Associates, stating that Farley Associates had breached the contract and the payment bond. According to Guilford County Schools, the bonding company, The Hartford Financial Services Group Inc., has taken over the project, which has a new construction deadline of Oct. 31, 2012.
McNair was originally scheduled to be completed by July 18, 2012, in time for students to occupy the school at the end of August.
Until McNair is finished, students in kindergarten and first grade are attending Brightwood Elementary School, while third, fourth and fifth graders are attending Jesse Wharton Elementary School. Second grade, English as a second language and special education students have been split between the two schools.
Guilford County Schools claims that Farley Associates failed to supply enough properly skilled workers to the McNair project; failed to pay subcontractors for material or labor on time; fell more than 14 days behind the construction schedule and failed to promptly take steps to get back on schedule; failed to achieve substantial completion of the school by the deadline required by the contract; and failed to comply with coordination and scheduling obligations.
Another major subcontractor, who asked not to be named, also said that Farley Associates had stopped paying subcontractors before Divine Electric stopped work. That subcontractor said his company has had problems getting paid by Farley Associates since it began work in the fall of 2011.
Arambula said his company owes its suppliers $500,000 on a joint line of credit with Farley Associates, and had run up other unnecessary costs on the McNair project because the general contractor was behind on the project.
"I think when we pulled off we had 23 or 24 men on that contract," he said. "Typically you wouldn't put that many electricians on a school unless the job was behind schedule. But the general contractor was behind schedule, which meant more manpower, more hours, which cost us a fortune."
As late as August 14, Guilford County Schools Executive Director of Facilities Planning and Construction Robert Melton told the school board that McNair would open "on time" on August 27. But to anyone with even a passing knowledge of construction who visited the site, that was obviously not true.
By Friday, August 17, all hopes of opening McNair by the start of school were abandoned, and Guilford County Schools Chief of Staff Nora Carr sent an email to top administrators and school board members titled, "Urgent Information Regarding McNair," outlining the plan for moving students to other schools.
On Monday, August 20, Bolick, Guilford County Schools Director of Construction Julius Monk and Melton met with Jeffrey Grady, an attorney with the Charlotte law firm Katten Muchin Rosenman, which represents Farley Associates.
On August 23, Grady wrote Bolick that Farley Associates and Hartford had taken steps to ensure that all of the "outstanding, documented and meritorious" claims of subcontractors and suppliers would be paid quickly.
The second subcontractor said his company would likely quit the McNair project unless paid within a short period.
"They owe me quite a bit of money," he said. "If they don't pay me, I'll probably be pulling off the job soon."
Arambula said his company had not been paid for a longer period than his contract with Farley Associates required and that his company had been sending Farley Associates regular bills.
"We had a contractual OK to stop when we did," he said. "They knew."
Monk has said that subcontractors have approached Guilford County Schools with claims of not being paid by Farley Associates, and the school system referred them to Hartford.
The McNair construction project is a single-prime project, meaning Guilford County Schools hired one general contractor – Farley Associates – and that Farley Associates was responsible for hiring and paying all subcontractors.
Property owners such as Guilford County Schools require general contractors to have bonds through companies such as Hartford, so that the bonding company will pay for the remainder of construction if the general contractor fails to finish it. Ideally, requiring bonding also reduces lawsuits, at least for the property owner, although the bonding company can sue the contractor.
Arambula said he understands that general contractors such as Farley Associates are having a hard time in the current economy, as well as subcontractors.
"I feel bad for the kids and the community," he said. "It's going to be a beautiful school."
James "Trey" Farley III, the president of Farley Associates, has declined to comment on any of the issues raised by the delay in McNair's completion, and the law firm representing Farley – Katten Muchin Rosenman – has not returned a call for comment.