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Dade City businesses say they're owed $288,000 for subcontract work at Bay Pines cemetery

ST. PETERSBURG — To the owners of two Dade City companies, being hired to work at the veterans cemetery at Bay Pines was a great honor.

And they said they didn't give a second thought about doing work up front without being first paid by the private contractor that hired them. After all, it was a Department of Veterans Affairs job. They were sure the government's involvement protected them.

Or maybe not.

Creekside Nursery and Statham Construction, both of Dade City, said the Washington contractor that hired them for a major renovation at the Bay Pines cemetery has refused to pay them nearly $290,000 for their work.

Creekside says it has been paid $100,000 but is still owed about $248,000 for turf replacement and headstone raising and realignment.

Statham, which provided materials for the job, says it is owed about $40,000.

And while the Washington contractor, the Davis Group 1 Inc., that hired them as subcontractors was itself hired by the VA to do the work, the Dade City firms said the VA has done little to help them collect.

In fact, they said, the VA is allowing the Davis Group to continue work on its $563,000 VA contract without any penalty for not paying the two local firms. They say that unfairly boosts Davis Group profits at their expense.

Creekside and Statham said the financial hit could drive them out of business with the loss of more than 30 jobs.

"We did everything exactly the way it was supposed to be done," said Tom Romaelle, general manager of Creekside. "If the VA knows something is wrong, they see it and they allow it to continue, it's like being an accessory after the fact."

Representatives of the Davis Group declined requests for interviews, though its attorney provided limited information in an e-mail to the St. Petersburg Times.

In a letter to Creekside a month after the deadline to pay, a Davis Group attorney cited "performance issues" as one possible reason for nonpayment.

Specifically, the attorney said, Creekside stopped doing work on the project. The lawyer said the Davis Group may also dispute some of the invoices submitted by Creekside.

But Zenen Valdes, Creekside's owner, said the reason the two companies stopped working was that the Davis Group refused to pay them and stopped returning calls.

A VA spokesman said its contract is with the Davis Group, not the subcontractors, and as a result the agency's ability to force the Davis Group to pay its subcontractors is limited.

But offering few details, the spokesman said the VA is working behind the scenes to mediate the dispute and has asked the Davis Group to settle the matter.

"I don't want to give people the wrong impression that we're just ignoring this," said Tom Miller, director of logistics and management services for the VA's National Cemetery Administration. "We're working behind the scenes. We just can't broadcast it when we're doing it."

But when asked if the VA would terminate its contract with the Davis Group because of the group's failure to pay its subcontractors, NCA spokesman Mike Nacincik said, "It would take a lot more than that."

So far, the Davis Group has been paid about $86,000 by the VA out of the $563,000 contract.

Valdes has sought help from the office of Rep. Ginny Brown-Waite, which has told him it is looking into the situation.

And he said he plans to file suit against the Davis Group, a disabled veteran-owned business that, like many similarly owned firms, gets preferential treatment on some VA contracts.

The few public details about the Davis Group raise additional questions.

The VA's contract with the Davis Group required that at least 50 percent of the work be conducted by disabled veterans. But Valdes said all the work was done by his company, not the Davis Group, and neither he nor the 15 employees are veterans.

The company, however, said Valdes is incorrect and that Davis Group workers were on site on a weekly basis.

And the Davis Group's president, Virginia resident Carolyn Davis, declared personal bankruptcy about a month after her firm won the Bay Pines contract.

In bankruptcy papers, she listed $1,000 in monthly income and $30 cash on hand. She also owes the IRS $60,000, bankruptcy papers show.

Valdes said had he known of the bankruptcy, he may not have agreed to do work for the company.

The VA said it does due diligence on firms it hires to ensure they have the ability to complete work. It is unclear if the VA knew about the bankruptcy, though a Davis Group attorney said the company provided all relevant information about itself to the VA.

"You figure the government is behind the work, so you think, hey, everything's got to be good," Valdes said. "And this is happening at a place where it shouldn't happen. The cemetery is a place of honor."

William R. Levesque can be reached at levesque@sptimes.com or (813) 269-5306.

Dade City businesses say they're owed $288,000 for subcontract work at Bay Pines cemetery 07/05/09 [Last modified: Friday, July 10, 2009 5:26pm]
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