A consultant tasked with overseeing construction on a long-stalled $90 million maintenance and cargo project at Honolulu airport was later granted a $2.4 million contract extension by the state, and some lawmakers want to know why.
Senate Government Operations Committee Chairwoman Donna Mercado Kim urged the state Attorney General’s Office to look closely at the role played by consultant Wesley R. Segawa &Associates Inc., saying the consultant may be partly liable for some of the problems on the job.
Segawa was initially awarded a
$4 million contract in 2009 to oversee construction on the 280,000-square-foot maintenance hangar and cargo facility, which is a critical component of a larger, long-delayed Honolulu Airport modernization effort.
The general contractor on that hangar job was dck Pacific Construction LLC, which won a $73 million state Department of Transportation contract to build the hangar and related facilities.
Lawmakers were told at a briefing Thursday that a dozen change orders then increased the size of dck’s contract to about $90 million, and the state paid a total of about $70 million to the company. However, transportation officials stopped making payments to dck after they learned the company was not paying subcontractors who worked on the job, according to court filings.
Dck was declared in default of the contract in late December 2015, and the hangar project has been stalled ever since. The state, dck and subcontractors who worked on the job are now suing one another, and the Attorney General’s Office has asked lawmakers for permission to pay out more than $10 million to settle claims by the subcontractors.
Hawaiian Airlines has stepped in to finish the job, and Hawaiian’s Chief Executive Officer, Mark Dunkerley, has said his company has identified 3,500 “issues” that need to be resolved in the unfinished building, about half of which are construction flaws.
That sequence of events prompted Kim (D, Kalihi Valley-Moanalua-Halawa) to ask why transportation officials extended the contract for Segawa.
Kim said she was told there was $1 million still unspent from the original Segawa contract in December 2015 when the hangar job shut down, and yet the state then extended the consultant’s contract by another $2.4 million last May.
Deputy Attorney General John Price replied it was obvious more money would be needed for construction management to see the hangar job through to completion. Transportation officials were unsure at the time if the state would hire a new general contractor or make arrangements to have Hawaiian Airlines complete the project, he said.
“And of course, when you terminate a general contractor, you don’t need a crystal ball to see litigation on the horizon, and the construction manager is critical for assistance in litigation,” Price said. “So, with all of those factors, it was clear that the services of Segawa were going to be necessary any way you slice it.”
State Attorney General Douglas Chin said Segawa is involved in the ongoing lawsuits because it was the project manager, and Price said the consultant is assisting the state by providing its analysis of records of work and spending in the dispute.
Kim said she walked through the hangar project and saw some of the construction problems that have been identified by Hawaiian Airlines, including portions of the building that were built “a foot too low, so that the trucks cannot go in.”
Rollup doors that were supposed to be operated by electric motors cannot be operated because electrical lines were not run to the doors, Kim said, and she wondered whether Segawa could be at fault in any way.
“Here we’ve got Segawa involved in helping us with the litigation, but what’s to say that Segawa doesn’t get sued by the state?” Kim asked. “For perhaps, if they had done all of their job in identifying all of the discrepancies and identifying the fact that the subs weren’t paid, and all of this stuff that they perhaps, maybe, didn’t do all that they were supposed to do? And maybe they might be involved, so why would we get them involved and extend their contract when they could possibly be liable in this whole situation?”
Price replied that “theoretically it’s possible, but we don’t think so. We’ve seen their work, and we have no reason to think so.”
Kim then read passages from Segawa’s original contract, including provisions requiring the consultant to make sure all of the plans are followed, and that the design of the structure meets state requirements.
“To me, had these things been done, we may not be in the situation we’re in to this degree,” she said. Kim said she does not know that Segawa was at fault, but “here we are, the work didn’t get done, all of the deficiencies equals somebody fell down on the job, or everybody fell down on the job.”
Price said that as far as he knows, Segawa observed and noted “what was done right and what was done wrong,” which is how the state knows of the problems with the project. He said all of the noted problems with construction would have to be corrected before the state would accept the job and make final payment.
Kim said her staff invited Segawa to attend the hearing, but it declined. A Segawa employee who answered the telephone at the company offices took a message asking for a comment, but the company did not return the call or respond Thursday.
