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Morganton psychiatric hospital project subject of dispute between DHHS and contractor, P.1

We have previously looked at the topic of construction delays on this blog, mentioning some of the principles of sorting out such disputes, which are quite common in construction projects. As easy as it may be to look at the general rules that govern construction contract disputes, sorting out the details can be hard in practice.

Part of the reason for this is that both sides in a construction dispute can have significantly reports on the events underlying the dispute, and who is responsible under the contract for problems that arise. A good example of this is a state-funded construction project for a mental hospital in Morganton. The contract was struck back in 2012 on a low bid and was supposed to have been completed by 2015, but has experienced massive delays since 2013. Those delays eventually led to an impasse between state officials and the construction company heading up the project.

According to documents obtained by public request, the state has accused the contractor of attempting to hide delays in and breaching its duties under the contract. From the start, there were various problems with the project, including soil erosion, water damage, failure to shield the project from the elements, and a major surveying error in 2013. The latter resulted in a major delay of the overall project. As the problems accumulated, the contractor kept moving back its expected completion date. Eventually, it got to the point where neither side was willing to compromise on funding the project to completion.

Now, under the new Secretary for the North Carolina Department of Health and Human Services, efforts are underway to get the problem quickly addressed. The agency is looking to cancel the contract with the construction company.

In our next post, we’ll continue looking at the dispute, and specifically at the different way the state and the company look at the problems that led up to the dispute. 

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