Monte fires Main Street contractor, will tap performance bond

MONTESANO — City officials in Montesano say they have exhausted all other options in dealing with Main Street contractor South Bay Excavating of Olympia and they now plan to tap the required bank-backed performance bond the contractor put up when bidding on the project. The decision effectively fires the contractor from the job and lets the city fix the problems on its own.

It’s unusual for any local government to actually use the performance bonds, which are a state requirement to ensure projects are actually finished according to contracted specifications. Usually, both parties can come to an agreement on conflicting items.

But, in this case the city and South Bay Excavating can’t agree on fixes for a range of issues, including a nearly one-inch dip in the road at the start of the Main Street project as well as several bulb-outs that were not built to specifications. The contractor had been arguing that there were engineer and design issues from the start and it wasn’t the company’s fault. South Bay refused to do the work without extra compensation.

Montesano Public Works Director Rocky Howard has been threatening for months to tap the performance bond, but hoped both parties could come to an agreement before that step. Although the city has technically fired its contractor, South Bay has one last chance — a seven-day window — to agree to the city’s terms, Howard said.

Howard said the bonding agent has already been contacted.

“I want to make sure we’re pursuing that option aggressively,” Councilman Ken Walkington told Howard during Tuesday’s council meeting.

On April 8, the city’s contractor engineer, Parametrix, notified the city that they were issuing a “15-day countdown for the resolution of the defective and unauthorized work.”

Because South Bay Excavating took no action during this timeframe to fix the problems, “the city would have grounds to terminate the existing contract,” according to Engineer Steve Schmitz.

Schmitz provided notice on April 16 to South Bay Excavating’s owner that the contractor “is out of compliance” with its contract involving the city.

“The contractor has made no action to correct deficiencies noted on the project within the timeline specified,” Schmitz wrote.

The city would find another contractor to fix the issues, according to Howard, who wants work to begin in the next month or so to keep impacts to local businesses at a minimum.

The city has paid more than $1 million on the project, so far, with the original bid for the project at $958,913.

Howard told the Montesano City Council Tuesday night that the fight is over about $40,000 in work.

The two biggest issues remain a nearly one-inch dip in Main Street from the area the construction project started in front of the Shell Station as well as seven of the bulb-outs, which were supposed to have a design of a 15-foot radius so that a street sweeper could navigate, but the contractor built it too small.

Howard says he thinks the contractor dug the street out too far and placed the rock and asphalt down, resulting in the dip. It would take a core drilling sample in the brand-new road to know for sure. Recent rain spells have proven that a significant amount of pooling of water could be seen at the area where the dip in the road is. To make sure the city wasn’t being unreasonable with its request to rip out parts of the bulb-outs and re-do the job, Howard had the city’s street sweeper make an attempt to clean out the questionable areas. The sweeper was able to get into two of the seven questionable bulb-outs, even with the design flaw, but couldn’t get into the other areas.

Just to get the project done sooner rather than later, the city offered to just have the contractor replace five out of the seven questionable bulb-outs, but Howard says South Bay refused. There is also an issue involving several thousand dollars in costs related to the rock placed beneath Main Street before the paving project began.


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