Contractor: Failed Jail Caused Loss Of M-1 Rail Project; Awarded To Cali. Company
DETROIT (WWJ) – A local construction company lost out on a contract to build the Woodward Light Rail because of all the criticism surrounding the botched Wayne County Jail project — a contract that eventually went to a company outside of Michigan.
John Rakolta Jr., chariman and CEO of Walbridge Construction, said a clause in their contract with the county prevented them from making any comments to the public about the $91 million over-budget jail project.
But now that their contract has been terminated, Rakolta is speaking out. He sat down for a one-on-one interview with WWJ’s City Beat Reporter Vickie Thomas and detailed exactly how the 100-year-old company’s image took a massive hit with the jail controversy.
“I understood the reasons for that clause. I never thought in the beginning that they were intended to suppress our voice, they were more done to protect security of the public and the county and the running of the jail,” he said. “But unfortunately it turned out that while the jail spun into disarray, we were unable to defend ourselves or to comment publicly.”
Along with their diminished reputation went prospective projects, including construction of the Woodward Light Rail — which over the summer was awarded to California-based Stacey and Whitbeck, Inc.
“The real impact is at a personal level, it’s the subcontractor market, 500 jobs that have been lost, all those people that would have provided a lot of benefit and momentum in the local economy,” he said. “We lost the M-1 Rail project. We were selected for that project but when the bad press reports came out [about the jail], M-1 chose to begin negotiations with another contractor to avoid being subjected to public criticism. So now, many of the jobs and revenues are going to out-of-state contractors instead of staying in state.”
Still, Rakolta said he cannot entirely blame bad press, since his company was prohibited from defending itself publicly.
“I’m not angry, I’m frustrated through the circumstances and I don’t blame anybody. Sometimes, these are the unintended consequences of being involved in a competitive process in our state and in our country. I love Detroit, I love the state of Michigan and we’re committed to making sure this is a better place to live for all,” he said.
There’s been a lot of finger-pointing over the failed jail, but Rakolta said Walbridge Construction is not at fault.
“We don’t take any responsibility for the project’s failure. The Hubble, Roth and Clark report is very instructive on this matter — it says that we notified the county and AECOM through multiple forms whenever there was a legitimate price increase that they has asked us to price. We kept a running tally of those increases and we only proceeded after receiving written authorization to proceed. In sum, we followed our contract and refused to proceed when it became apparent that the cost commitment was going to exceed the projects approved,” he said.
Rakolta said basically, two things went wrong with the jail.
“One was that the county never had the sufficient bonding in place to do the project. Secondly, there were changes that were decided upon after the contract was signed. Bottom line,” he said.
Meantime, Wayne County just announced it is suing Walbridge Construction, along with project managers AECOM and Ghafari Associates. The lawsuit alleges the companies failed to abide by contractual obligations, leading to millions of dollars in cost overruns.
Construction on the jail, originally budgeted to cost $300 million, was halted in June after county officials received a report from AECOM which said the actual cost had increased to $391 million.