BARNEGAT – Local authorities have terminated the contract with Frankoski Construction Company, the contractor hired to construct the township’s new municipal complex, citing non-performance issues.
Former Mayor John J. Novak, an attorney serving as special counsel for the municipal building project, has taken charge of addressing the legal matters pertaining to the delays linked to the construction. Novak officially terminated the contract and contacted the insurance company that issued the bond associated with the work. It was his third attempt to reach them.
“A performance bond ensures performance,” Novak said. “The contractor has not performed; I have called and demanded that the surety, Traveler’s Insurance Company, live up to ensuring the performance.”
Typically, when a non-performance bond is invoked, the insurance company intervenes by appointing a contractor to finalize the project. Barnegat would be responsible for covering any outstanding balance not previously paid to Frankoski, including any additional costs incurred through authorized change orders.
“Barnegat is in a good spot on our project,” shared Novak. “As far as the percentage of work completed, the percentage of work not completed, and where we are financially. The project is financially sound; it’s just past deadline.”
Fifteen individuals convened for a day-long meeting on issues related to the non-completion of the project, which included a walk-through of the building. Those in attendance from Barnegat included Novak, Deputy Mayor Joe Marte, Township Administrator Martin Lisella, Township Engineer Kurt Otto, Township Director of Information Technology Joe Jennings, and Police Lt. Jeff Ryan (who serves as the liaison for the police aspect of the project).
An attorney from Travelers Insurance Company, a construction representative from the insurance company, and a representative from their claims office also participated in the meeting, as did Joe Frankowski and Greg Frankowski, Legacy Construction, as the owner’s representative, and two of the project architects.
Novak is formulating a comprehensive plan of action that will be incorporated within an interim agreement. This approach is aimed at completing the building project while ensuring that no claims against Frankoski or any other party are waived.
“The attorney for Travelers and I are going to negotiate an agreement,” Novak shared. “If that agreement is acceptable to Barnegat as my client and Frankoski, then we will have an agreement with Travelers.”
In 2017, a bond ordinance allocated $15 million for the construction of a new municipal complex and a public works building. The public works building is already complete.
In 2022, the township passed another ordinance allocating an additional $1.5 million from the township’s capital improvement fund. This money was needed to cover change orders authorized by the architect and insufficient funds from the original bond. The additional money is also targeted to pay for new computer systems, furniture, and other things needed to transition to the new municipal complex.
Frankoski Construction Company won the contract to build the new municipal complex with the lowest bid of $12,964,000. State law requires municipalities to choose the lowest responsible bidder, which means that the bidder must be able to complete the project on time and within budget. In some cases, this may mean passing over a bid that is significantly lower than the other bids, if the municipality has concerns about the bidder’s ability to complete the project. Frankoski’s bid was close to the next highest bid among the ten contractors that submitted bids for the project.
Ground was initially broken in December 2020, with an estimated completion date of July 2022 for Phase I of the project. Additional site work, including demolition of the current town hall, was scheduled for completion six months after the new building was ready for occupancy. However, Phase 2 of the work cannot start until the police department and other municipal employees have moved into the new complex.
Novak explained that the township consented to a limited-time schedule extension for various reasons. While he was still in office as mayor at the project’s outset, officials agreed to postpone the project’s start date due to its proximity to Christmas week. Additionally, a series of change orders were approved, providing the contractor additional time.
“The substantial completion was supposed to be due last fall,” Novak said. “We should have been almost done with the site work.”
Issues extended beyond just missed deadlines. According to Novak, Frankoski also fell short in providing an adequate workforce to complete the project. Furthermore, compounding these challenges were specific construction defects that demanded substantial resources.
The architect, engineer, and Legacy Construction, retained as Barnegat’s owner representative, addressed the defects with the contractor, including issues related to workmanship.
“When you put it altogether, they were not performing under the terms of the contract,” said Novak. “We gave them numerous warnings and met with them. We told them we wanted to be reasonable and gave them many chances.”
The contractor has received partial payments for the work completed thus far, with Barnegat withholding a percentage as retainage until the project reaches completion. Each payment request underwent a thorough evaluation process, often resulting in approval, denial, or partial approval/partial denial by the architect, who also conducts on-site inspections.
As far as due diligence regarding Frankoski Construction, Novak pointed out that the bonding company would not issue a performance bond unless they were satisfied with the expertise of the company and could guarantee their performance.
The list of legal actions against the contractor hired to build Barnegat’s municipal complex primarily involves claims made by companies after the township hired Frankoski. Subcontractors, who mainly did jobs involving public entities, reported underpayment in the tens of thousands of dollars.
A class action lawsuit brought at the beginning of the year named Frankoski and a multitude of other companies of being involved in a “wage theft scheme” involving undocumented immigrants who have worked on at least 17 New Jersey public projects.
Local residents may recall that a short time after construction began on the Barnegat Town Hall project, union protesters erected a giant inflatable rat to object to a contract awarded by Frankowski to R.L. Concrete, Inc. Members of the Laborers’ International Union of North America, Local 77, alleged the subcontractor had engaged in unfair labor practices.
Ultimately, the general consensus is what matters most is the project gets back on track and is completed. Barnegat’s current municipal structures, constructed in the 1970s, have surpassed their intended lifespan.
