Faulty $1.9M tank sits unused

Source: http://www.hawaiitribune-herald.com, April 14, 2011
By Nancy Cook Lauer

Legal fight drags on for 2004 project
The engineering firm that designed a $1.9 million water tank county officials say is defective has been considered for 18 additional county contracts but was awarded only one since the county sued it.

The Department of Water Supply filed a lawsuit against consultant Wesley R. Segawa & Associates in September 2009. The county had paid Segawa $109,300 to design the tank and assist the Water Board during the bidding and construction process. The tank project was paid for with customer fees collected by the department.

The million-gallon water tank has sat, unused, at Komohana and Kawailani streets in Hilo since 2004. The Water Department claims the concrete roof is cracked and sagging because of poor design and deficient steel reinforcement.

While the lawsuit drags on, state procurement law doesn’t give the county the authority to prohibit Segawa from future work. But it can take past performance into account when awarding contracts, the law states.

The county annually solicits statements of qualifications from consultants. A three-person agency panel ranks three or more companies from that list, and then the purchasing agency negotiates with the contractors in order of ranking.

Segawa has been considered for a variety of projects since the county sued it, most recently a $30,000 Public Works Department contract awarded April 6 to Harold Sugiyama LLC to inspect bridges.

But the only contract awarded to Segawa was a $6,026 supplement in March 2010 to a Public Works Department contract to upgrade Palani Road.

In the water tank lawsuit, Assistant Corporation Counsel Katherine Garson is asking the court to make Segawa pay the costs for repair, removal or replacement of the tank, plus damages, costs and attorneys’ fees. She’s asking for a jury trial in the case. Segawa has denied the allegations in the lawsuit.

“We are working together toward a mutual resolution,” Garson said this week.

Segawa’s attorney, Randall K. Schmit, didn’t return a phone call. Earlier, Schmit had sued the contractor building the tank, Jas. W. Glover Ltd. But allegations against the builder have since been dropped.

Debarment or suspension of contractors from the procurement list are considered only in serious cases, such as criminal conviction for embezzlement, antitrust violations and contract violations that include “deliberate failure without good cause to perform,” under the state law.

Deputy Corporation Counsel Brooks Bancroft, who is representing the Water Department in the litigation, said he couldn’t comment on county procurement policies, which are based on state law.

Bancroft is optimistic the county will reach a settlement with Segawa that includes a remediation plan. He said there are no hearings or court dates scheduled, but the case is moving as expeditiously as possible while protecting the county’s investment.

“The ultimate goal is to arrive at a remediation plan that will permanently fix the problem and the water department’s and the taxpayers’ interests are protected by any settlement of the issues,” Bancroft said.

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