Recently, the construction of Saddleback College’s new Sciences Building has broken ground. For the project, the South Orange County Community College District selected construction firm C.W. Driver to be the contractor for the project.
While C.W. Driver does have a strong reputation in the construction business, they have also been involved in several cases where concerns of overspending and payment disputes have occurred.
The purpose of this investigation is to uncover whether or not C.W. Driver is responsible for increases in price orders, general errors in construction, and delays in delivery.
Recently the construction of Saddleback College’s new Sciences Building in Lot 5 ran into issues concerning the utilities and groundwork, according to representatives from the South Orange County Community College District and C.W. Driver.
The district and the construction team were unaware of utilities beneath Lot 5’s concrete. Once construction began and ground was broken, the utilities were discovered, requiring them to be replaced and re-routed so construction could continue.
The $58 million project was to be finished in late 2015, but due to the problems encountered the project will be delayed by an unspecified amount of time. However, both the district and C.W. Driver say that occurrences like these are to be expected on any construction job.
“On any project, you’ve got the good, the bad, and the ugly,” said Walter Rice, director of facilities planning for SOCCCD. “Most of the things underneath the ground weren’t supposed to be there.”
The re-routing of utilities is also the cause of the current road closure on Library Road, but Rice stressed that C.W. Driver was working on “mitigating” the lost time due to the utilities and to reopen Library Road.
“Everything is done around the academic calendar,” Rice said, highlighting that the rerouting of power lines was done during Spring Break to be less intrusive to students. “We’re working overtime to fix these roads. That’s the beauty of our relationship with C.W. Driver. They’ve been able to come in and work these hours and adapt to the situation.”
Rafael Quazon, senior project manager for Kitchell CEM, noted the construction team is operating carefully and efficiently to keep the project under budget.
“When a project is public, it’s everyone’s money,” Quazon said. “We felt a greater degree of fiscal responsibility than say, a private project.”
Despite this, the $58 million price tag is up from the original cost of the project. The district and C.W. Driver have chalked this up to Chinese companies buying massive amounts of materials and inflation.
That being said, the construction team is still optimistic about the project.
“We’ve got the A-Team here,” Rice said, “The best of the best. There’s good team synergy, and everything is solved as a group.”
The entire construction project is based around a “Lease Leaseback” contract, as opposed to a “Bid/Buy/Build” contract, as a way to cut costs and get the project on time.
In “Bid/Buy/Build” contract, individual contractors place bids to build and construct a project. Once a suitable contractor is found, their bid is then bought and construction can commence.
However, in “Lease/Lease-back”, the process is somewhat different. The bidding process is not advertised, and usually there is only one contractor attached to the project. The building site is then leased to the contractor at a very low rate, often at $1 a year. Once the project is built, the contractor and the customer enter into another lease.
This lease, called a “Facilities Lease”, leases the building back to the customer. The customer pays the lease for a certain amount of years, usually limited to 40 years. This is how the contractor is paid for the services rendered.
In a report presented by California’s Coalition for Adequate School Housing, a lobbying group advocating the building and modernization of K-12 schools, The Lease/Lease-back method has claimed to be “a proven method to deliver school facilities on time, on budget, and with a reduced risk of… design issues, delays, and costs overruns.”
Despite this, costs have still risen under C.W. Driver implementing the Lease/Lease-back delivery method for Saddleback’s Sciences building. However, as stated above, the increase in cost is related more to the cost of materials and competition in the construction sector as a whole, rather than mismanagement on Driver’s part.
C.W. Driver has still been involved in projects that have gone up in scale and price well beyond their original estimates. As recently as February of 2014, the construction firm has been embroiled in a massive civic project in Newport Beach.
The project, formerly a sparse City Hall, has evolved into an enormous campus, which includes a Library, a parking structure, and two parks. The project ballooned from $48 million to over $142 million in a matter of years. In a report by the OC Register, the blame for the price increase was attributed to the City’s Building Committee rather than Driver and associated subcontractors.
While the project was finished on time, the City of Newport Beach continues to pay C.W. Driver and other subcontractors fines in the millions of dollars, mostly for work such as carpentry and landscaping.
Driver was also involved in a lawsuit dating back to 2008 concerning remodeling on luxury suites at a Disneyland hotel. The suit, filed by a subcontractor hired to work with C.W. Driver, claimed that Driver requested work done by the subcontractor and then refused to pay for the work done.
The case was later dismissed in arbitration. The arbitration found that the subcontractor’s claim that Driver had been compelled by Disney to request the work was deemed to be false, and Driver was not found to be at fault. However it is not the first time C.W. Driver has been involved in a suit regarding money and delivery of a project.
The last case concerns an apartment building C.W. Driver was contracted to build in 1984. Halfway through construction, C.W. Driver stopped work on the project and sued the firm who hired them, claiming they were not paid for the work rendered. The firm, Huntington Breakers Apartments Ltd., then sued Driver for construction defects in the building.
C.W. Driver was awarded the money in the end, but construction defects were found in the buildings three years later. Another suit followed, but was thrown out by a court.
C.W. Driver has had a recent history of lawsuits concerning projects, but after investigating both Driver’s actions during construction and their opponents in the lawsuit, it would appear that the issues are more applicable to mismanagement and excessive spending on the part of C.W. Driver’s customers, rather than Driver itself.