Opinion ID: 1638588
Heading Depth: 3
Heading Rank: 1

Heading: The Combiflex System

Text: Contract 15 required that reactor basin # 2 be constructed to satisfy certain pressure tests. To help maintain pressure in the reactor basin, the plans and specifications for Project 15 required the use of the Sikadur-Combiflex System (the Combiflex system), manufactured by Sika Corporation (Sika). The Combiflex system consisted of strips of foam glued or welded over seams that existed at joints between the concrete slabs and T-sections that were used to construct the reactor basin. After Harbert entered into Contract 15, it entered into a subcontract with Spiderman's Professional Services, Inc. (Spiderman), pursuant to which Spiderman agreed to install the Combiflex system on reactor basin #2. [5] Spiderman purchased the Combiflex system from a supplier. In October 1996, after Harbert had constructed reactor basin # 2, Spiderman completed the installation of the Combiflex system, allegedly in accordance with the plans and specifications for Contract 15 and in accordance with on-site directions of a representative from Sika. [6] In October 1996, both Sika and Spiderman issued their respective warranties as to any defects in material and or workmanship associated with the Combiflex system. Subsection 7.14 of the standard specifications provided that Harbert shall accept final responsibility for completion and final acceptance of the overall Project including work done by subcontractors and material and equipment provided by vendors and suppliers. After Spiderman installed the Combiflex system, construction continued on the rest of Project 15. Disputes arose between Harbert and some of its subcontractors, on the one hand, and BCM, on the other, as to certain requirements under Contract 15, including whether the plans and specifications called for the installation of certain interlock controls. Harbert requested that BCM approve a change order for the interlock controls. During the dispute over the interlock-control change order, BCM requested that Harbert provide the Board with an updated schedule for completing Project 15, particularly when it became apparent that Project 15 would not be completed by the scheduled completion date. On April 10, 1997, Harbert sent a letter to Joseph N. Asarisi, BCM's Construction and Service Manager for Project 15 and Project 16. The letter stated: It is impossible for us to provide you with an accurate schedule of completion when there are still items of omission in the contract documents that directly affect the progress and start up of the plant. We have submitted a Request for Change Order concerning this work and when we receive your go ahead, we will be able to provide you with a schedule. I realize you have been asking for a schedule for a while, but with the changing scope of work on the critical path, we cannot furnish you with one. On April 14, 1997, Asarisi sent Harbert a letter in which he refused to issue the change order Harbert had requested because, according to Asarisi, it was clear that the interlock controls are required under your contract and no change order is required. The letter further stated that Asarisi expect[ed] to have an updated schedule in [BCM's] office no later than Friday April 18, 1997; that BCM would request the bonding company to take over the project if BCM did not receive a satisfactory, updated schedule by that date; and that liquidated damages [were] continuing to accrue. To date, [BCM] estimate[s] the liquidated damages to be approximately $59,950. As to liquidated damages, paragraph 6 of Contract 15 states, in part: [The Board] may retain the sum of $550.00 per day for each day thereafter, Sundays and holidays included, that the Work remains uncompleted, which sum shall represent the actual damages which the [Board] will have sustained per day by failure of [Harbert] to complete the Work within the time stipulated, and this sum is not a penalty, being the stipulated damages the [Board] will have sustained in the event of such default by [Harbert]. On April 17, 1997, Harbert forwarded a completion schedule for Project 15 to Asarisi. At an April 21, 1997, meeting of the Board, BCM updated the Board on the status of Project 15. The minutes of the meeting state, in part: The contract time was 600 days, with a starting date of February 13, 1995, and the original completion should have been October 17, 1996. The engineers met in November 1995, telling the contractor we were very concerned about the progress on the project and did not feel the contractor could finish on time. Mr. [John] Stege of Harbert assured us at that time that there was 6 months of float time on their schedule and he was ahead of schedule and would probably finish early. Another meeting was held in November 1996, a month after the original completion date. [BCM] and Board's staff agreed in that meeting to a 70-day time extension which put completion date December 26, 1996. We were assured by Mr. Stege at that time that the new reactor would be on line and the [Board] would have beneficial use. Based on that, we agreed to stop liquidated damages or to not assess liquidated damages at that time until December 26, 1996. However, that reactor is still not on line. [W. Malcolm] Steeves[, assistant director of the Board,] interjected that liquidated damages began December 26. Mr. Asarisi [of BCM] said we have a recent schedule from the contractor received last week showing the reactor will be on line first week in June, which is six months later than the contractor originally anticipated. .... ... [Mr. Asarisi said] [t]he whole project won't be complete until the first of August. ... Mr. Asarisi said the contractor probably has enough money in there to finish, but he's saying, once the Board deducts the liquidated damages from that, then there will be little left. In other words, the Board couldn't finish the job plus collect on the liquidated damages for the amount left in the project. .... Chair [Lewis G.] Odom[, Jr.] said we need to decide to see whether the contractor will meet his own schedule commitment of June or go ahead and refer the matter to the bonding company and ask them to complete the job or both. Can we do both? Mr. Steeves responded that one of the things that has happened is Harbert has replaced the person who came from Atlanta to do this station. This last one that came in January was doing a great job and they have recalled him. We told them they have to get an acceptable schedule to us by Friday. The schedule they gave us is not an acceptable schedule. In May 2007, reactor basin # 2 failed its first pressure test. Asarisi discussed the pressure-test failure with Harbert and requested that it correct the problem. Asarisi also sent the Board a letter that stated: Enclosed are three copies of Estimate No. 23 from ... Harbert ... in the amount of $147,437.73 for work performed [from December 21, 1996, through January 20, 1997] on the referenced project. Liquidated damages have been assessed at the rate of $550 per day for December 27, 1996 to January 20, 1997, totaling $13,750. This amount has been deducted from the total amount due the Contractor. We have checked this estimate, find it in order, and recommend that it be paid. We note that Harbert's Estimate No. 23 states that 98.58% of the Contract was in place. In the late spring and early summer of 1997, Harbert and Spiderman made several attempts to correct problems allegedly associated with the installation of the Combiflex system or certain construction problems associated with the reactor basin. Those attempts failed. Thereafter, Spiderman wrote Sika stating that the Combiflex system was not able to provide an airtight seal at the difficult details at the columns and the T-sections. On July 14, 1997, Harbert sent Asarisi a letter that stated, in part: Since May 1, 1997, when the pressure test of Reactor No. 2 failed due to discovered leaks in the structure's joints,... Harbert has proactively and diligently pursued the repair of these leaks to prevent further delays to this project. As evidenced by our May 7, 1997, letter to ... BCM, we fully complied with [the contract specifications] in implementing a repair procedure based on using the stipulated combiflex polyurethane sealant system manufactured and installed by the Sika Corporation. ... As you are well aware of, it has now been over two months and the repairs have not yielded the expected and intended results that everyone envisioned. It is [Harbert's] position, at this point in time, that we have thoroughly exhausted all required means and methods in performing this repair work in accordance to the contract documents and as directed by ... BCM. As of July 11, 1997, we have ceased repair operations until further notice. We are hereby requesting that ... BCM now provide an alternative repair method that will resolve this situation. It is imperative that we receive your response and direction no later than July 17, 1997 to prevent further delay to the start-up of Reactor No. 2 and the timely completion of this project. .... If you have any questions or require additional information regarding this matter, please feel free to contact this office. We look forward to receiving your direction in completing these repairs to the mutual satisfaction of all parties concerned. On August 12, 1997, Harbert sent Asarisi another letter. That letter stated: [I]t remains unclear as to whether the specified combiflex sealant system was the appropriate product to use at the tees and columns. In an effort to expedite the immediate solution of this matter, ... Harbert... has engaged the services of an independent sealant expert to inspect the combiflex sealant system that was previously installed in accordance to [the contract specifications]. This inspection will be conducted on Wednesday, August 13, 1997. Harbert retained Raymond J. Shutz, a materials consultant, to examine the installation of the Combiflex system on reactor basin #2. After his investigation, Shutz concluded that the Combiflex system was a good system for many applications, but that it was not suitable for sealing the double curvature joints which exist between the stems of double Tees and on the top of the columns in reactor basin # 2. On August 18, 1997, Harbert sent Asarisi a letter that stated, in part: Based on the results of the inspection and Mr. Shutz's assessment thereof, it is the position of ... Harbert ... that ... BCM will now have to select an appropriate alternative method [to seal reactor basin # 2]. We trust that ... BCM will provide the appropriate repair method accordingly to minimize any further delays that have occurred to the project as a result of this matter. For the record, all work on Reactor No. 2 ceased August 13, 1997. We look forward to receiving a positive response from ... BCM no later than August 22, 1997. In response, Asarisi sent Harbert a letter dated August 27, 1997, which stated, in part: Buddy Bonine from [Sika], will be at the [Project 15 site] on Tuesday, September 2, 1997, to inspect the installation and provide their opinion. As Mr. Steeves has previously indicated, we will provide ... Harbert ... an alternative sealant system to seal the Reactor if [Sika] agrees that the Combiflex system is not suitable for the application. In September 1997, after Sika inspected Spiderman's installation of the Combiflex system and the attempted repairs to the installation, the Board proposed that a certified Sika installer be hired to remove and then to reinstall the Combiflex system in one of the eight compartments in reactor basin # 2 as a test section. On September 17, 1997, Harbert sent Asarisi and Steeves a letter insisting that BCM approve an alternative sealant system for the reactor basin; the alternative system was subsequently referred to as Liquid Boot. Harbert's proposed alternative method involved, in part, the removal of the existing sealant from the reactor roof, reinstallation of a new backer rod; and the sealing of the joint(s) with a two (2) part epoxy material. In its September 17, 1997, letter, Harbert argued its position: We believe that the ... proposed method by the [Board] fails to address the real problem. By injecting a requirement that the sealant installer be pre-approved by the very same manufacturer whose product's suitability and integrity is questioned would, at one and the same time, both modify and tighten previously applicable specification requirements (which did not require the sealant installer to be pre-approved and supervised by the manufacturer), thereby subjectively permitting the sealant manufacturer to control the application, and not the installer. By insisting that the performance of this proposed work be restricted to a certified installer who was never before used on this project and by enabling the continuous supervision by the supplier of the questioned product, it is quite obvious that the application methods and techniques would differ, to some degree, from those of the original installer, Spiderman .... Moreover, the use of this method, if then extended to all seven (7) remaining cells in Reactor No. 2, would drastically increase the cost of repair while not necessarily bringing about a permanent fix, since the inappropriate product would still be used. The [Board] would thus be violating its own duty to mitigate the cost of resolving this problem. .... We would hope that the [Board] would not, in a desperate effort to avoid responsibility for the misapplication of an improperly suited product, attempt to now cover-up the problem by turning once again to the same manufacturer whose product has caused the problem in the first place. It is our steadfast position that we certainly cannot and will not acquiesce to the proposed method and approach by the [Board] in dealing with this problem. On October 16, 1997, Asarisi sent Harbert a letter stating that BCM had investigated Harbert's recommended alternative method for sealing reactor basin # 2. The letter stated that the sealant system recommended by Harbert had never been used over structural prestressed tees, and described two specific concerns Asarisi had about the use of the proposed system. The letter concludes: Based on the information presented we do not recommend the use of Liquid Boot. Subsection 5.10 of the standard specifications states: All work which has been rejected shall be remedied or else removed and replaced in an acceptable manner by [Harbert] at [its] own expense, and no compensation shall be allowed [it] for such removal or replacement. ... Upon failure on the part of [Harbert] to immediately comply with any order of [BCM] made under the provision of this Section [5], [the Board] shall have authority to cause defective work to be remedied, or removed and replaced ... and to deduct the cost from any monies due or to become due [Harbert]. In case no such monies are available, the amount shall be charged against [Federal]. On October 20, 1997, Asarisi sent Harbert another letter. The October 20 letter did not call on Harbert to reinstall the Combiflex system using a certified contractor selected by Sika. Instead, the letter informed Harbert that the Board had contracted with a certified Sika contractor to remove and replace the Combiflex material in one cell ... in Reactor No. 2. The cell will be tested for air tightness before and after the repair is made. If the repair is successful all associated costs will be deducted from money due ... Harbert... in accordance with [subsection] 5.10 of the Contract Documents.  (Emphasis added.) The Board retained Phoenix Coatings, Inc., to remove and reinstall the Combiflex system in a test cell of the reactor basin # 2. [7] The communications between the Board and Harbert continued in a letter from Harbert to the Board dated October 27, 1997: During our meeting on September 24, 1997, [8] ... it was our understanding that the Board agreed in principle to our proposed `Liquid Boot System' sealant repair method for Reactor No. 2 and that all that was necessary for us to proceed with this work was BCM's acknowledged approval. To date we have yet to receive BCM's approval nor written directive to proceed with the repair work. ... In order to avoid any further delays to the project, we request that you promptly intercede in resolving this matter by issuing an immediate notice to proceed with the Liquid Boot System repair. ... Harbert ... reserves its right to seek full compensation for all delay damages resulting from this matter to date. Asarisi responded in an October 29, 1997, letter to Harbert: As you requested, we have reviewed your offer to install a test section of the Liquid Boot before making a final decision to reject it. It is our opinion that a test section would need to be in place about six months to determine the effects of various temperature differentials on the concrete cap and the Liquid Boot. As you know, a delay of this magnitude is not acceptable. We also feel that the drain lines from the mixers you proposed will be a constant maintenance problem. Based on this and our previous correspondence, we cannot recommend Liquid Boot as an acceptable alternative to seal Reactor 2.