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Hernando County rightly finds dredging firm in breach of contract

The Hernando County Commission was right to determine that the company that won the $5 million contract to dredge the Hernando Beach channel was in breach of contract. Now the county has a new opportunity to jump-start this stalled public works project.

Its immediate tasks include seeking financial damages from the contractor's posted bond and preparing a defense for the promised lawsuit from Orion Dredging Services LLC. Most important, it must find another company to complete this long-delayed but necessary work to improve boating safety in the rocky channel.

The county faces a finish date of June 30, 2011, a deadline extended previously by the state Department of Transportation, which is financing much of the work. Testimony Tuesday revealed two companies already have contacted the county inquiring about finishing the job.

The work is available because the commission essentially fired Orion, the original contractor, by declining to fulfill the company's request for a $7 million change order and finding it breached its contract by not returning to work.

The decision came Tuesday at the conclusion of an appeal hearing in which Orion contended it had not violated its contract, said it wanted to complete the dredge, and blamed the escalating costs on the county's dredge consultant, Halcrow, which designed the project. If the outcome wasn't clear before the hearing started, it didn't take long for it to become evident the adversarial relationship was beyond repair.

Among the tidbits of testimony offered during the nearly four-hour proceeding:

• Procurement consultant Lisa Hammond said Orion wanted to tap $1.87 million in so-called standby costs for its inactivity since the project shut down months ago.

"They want to be paid for not working,'' Hammond told commissioners.

• Orion's vice president and counsel Peter Buchler suggested a county counter-offer to Orion's requested $7 million change order indicated an acknowledgement of culpability by the county. It sparked brusque indignation from Chairman John Druzbick.

• Turbidity from too much sediment in the discharge brought work to a halt in January requiring a project redesign and rewritten DEP permit. But Tuesday, Buchler stated that there was no guarantee the new plan would work.

"That pretty much does it for me,'' said Commissioner David Russell.

Indeed. It is difficult to invest millions of dollars — money the county doesn't have — in a company that won't guarantee the end product. The county's best offer of an additional $1.5 million to Orion, plus Hernando absorbing $3.3 million in disposal costs and landfill fees, triggered the insulting counter-offer from the company to reduce its change order by $80,000.

Buchler told the commission Orion has been damaged by this ordeal. What he didn't specify was how much of the damage was self-inflicted.

Hernando County rightly finds dredging firm in breach of contract 09/22/10 [Last modified: Wednesday, September 22, 2010 7:10pm]
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