Last month, the AOC had asserted that the county’s Justice Center project, set to be complete by this summer, was insufficiently bonded, and went to say that the issue they had to be resolved immediately.
The construction manager on the justice center project provided a Performance and Payment Bond for $456,250, far short of the full contract sum, said Hiatt, who added that the amount provided might only cover the construction manager’s fee.
Trigg County Judge-Executive Stan Humphries has previously said that he disagreed with the AOC assertion, stating that when more than 20 different smaller projects that encompass the overall justice center project are taken into account, the general project was already fully funded.
“Where the confusion is now, is whether CMs have to act like a general contractor and bid the whole contract,” Humphries previously said. He also said that while it isn’t necessarily fair to have to re-bond the project when it is so near completion, the county would comply with the AOC’s wishes.
In early March, John D. Minton Jr. of the AOC retained William G. Geisen, a construction law attorney from Cincinnati, and asked him to perform a review of the Kentucky court facilities construction program.
Geisen found that Kentucky law and contract documents both require that the construction manager furnish either a single bond or multiple bonds that equal 100 percent of the contract sum, according to a letter Minton wrote to Humphries in late March.
Completion of the Justice Center is still scheduled for June, according to officials.
A bond is a guarantee from the bonding company that the construction manager will be in full compliance with the contract and will pay all of the subcontractors, laborers, suppliers and others involved with the project.
The maximum limit of the bond is known as the penal sum, and if the construction manager defaults under the terms of the contract, the CM’s bonding company can be potentially liable for that default, with a maximum exposure equal to the penal sum, which in this case is more than $9.9 million, said Hiatt.