March 18, 2012
Granite Construction Inc.‘s joint venture with Yaquina River Contractors (YRC) received a Notice of Default from the Oregon Department of Transportation (ODOT) relating to the U.S. 20 project, according to a written statement issued by Granite on March 17.
Granite notes that the company is confident it is not in default of its obligations under the contract and that the allegations contained in the Notice are without merit. Granite plans to contest the Notice.
Granite has been in discussions with ODOT to address design issues and delays on the project due to unanticipated and continuing geotechnical conditions and landslide movement. Granite has been performing its duties under the contract, including working with ODOT to determine how to safely and most cost-effectively complete the project. ODOT was fully aware of Granite’s ongoing efforts, and the company was surprised by ODOT’s filing of the Notice.
In October 2011, a Dispute Review Board (DRB) concluded that ODOT is responsible to pay YRC for the costs of the delay and new design and construction work required to address the ongoing landslide issues. ODOT rejected the DRB’s findings and unilaterally disbanded the board.
The DRB comprises a panel of construction industry experts with experience in assessing disputes of this nature. Both parties agreed in the contract to place a large measure of importance on the DRB recommendations.
“Granite Construction Co. has never defaulted on a project in the history of the company,” said James H. Roberts, Granite president and CEO, in a written statement. “We take this Notice very seriously and intend to vigorously defend our position and reputation in this matter. Despite serious and unanticipated project difficulties, Granite remains committed to satisfying its contractual requirements on the U.S. 20 project.”