WA9302-CS 960723To:
MEMORANDUM
Peter G. Smith, City Attorney
From:
Kenneth M. Griffin, P.E., ACM/City Engineer
WA 93-02 / Gee Consultants Outstanding Invoices
Date: July 23, 1996
Attached to this memo, is a letter from Gee Consultants with a request for the City to withhold
monies from the general contractor NATGUN Corporation for outstanding invoices to Gee
Consultants. My understanding of the issues are as follows:
1)
The City hired NATGUN to construct a six million gallon ground storage tank. 'Our
specifications required the City to hire a testing firm to perform certain material tests
necessary to insure that the construction was meeting the minimum standard for construction
of this type. To meet this contract obligation, the City contracted with Gee Consultants.
2)
During the course of construction, it was NATGUN representatives opinion that they needed
additional testing on the project. They in turn contacted our materials testing firm on the
job site, Gee Consultants, to perform the additional testing.
3)
At no time did the City authorize Gee Consultants to perform the additional testing on
behalf of the City. It was authorized and performed solely under the direction of the
representatives of the NATGUN Corporation.
4)
It is the City's opinion that our contract with GEE Consultants is what controls our payment
to Gee Consultant and because we did not authorize Gee to do the additional work for
NATGUN then we are not responsible for payment.
5) GEE Consultants did not obtain a written contract from NATGUN Corporation but only
operated under a verbal agreement to perform additional testing.
GEE Consultants has repeatedly attempted to get NATGUN to pay the outstanding invoices.
Because GEE does not have a contract with NATGUN and because our contract does not cover
the additional work, GEE is now seeking relief through the City's contract with NATGUN. In
essence, Gee is requesting the City to withhold money from NATGUN and pay Gee the
outstanding invoices.
At the end of each project we require that the general contractor submit an affidavit stating that
all subcontractors have been paid. Because there is not a contract with GEE Consultants it is
somewhat cloudy on the issue of whether or not they are a valid subcontractor to NATGUN.
Even though they did perform work for NATGUN under a verbal agreement it is difficult for
the City to ascertain the actually scope of that work requested by NATGUN. This contract is
governed by not only the job specifications and contract but also by the North Central Texas
Standard Specifications for Public Works Construction, of which Item 1.52 entitled "Payment
Withheld" (copy enclosed) states that the owner may withhold payment for "(g)" failure of the
contractor to make payment to the subcontractor for material or labor.
I am obviously trying to resolve this issue before the final completion of the project. I am
requesting guidance on whether the City should get involve and withhold funds or whether we
should ignore Gee's request because Gee does not have a written contract with NATGUN. If
you need additional information such as the original contracts or specifications or the compete
North Central Texas Standard Specifications for Public Works please contact this office at your
convenience.