City Terminates Watts Constructors’ Right to Work on Joint Traffic Management Center

News Release from City and County of Honolulu, July 9, 2018

Honolulu – On Monday, July 9, the city sent a letter to Watts Constructors LLC (Watts), the general contractor for the Joint Traffic Management Center (JTMC), officially notifying Watts that its right to construct the JTMC was being terminated because of its failure to remedy numerous material defaults under the construction contract with the city. At the same time, the city sent a letter to Watts’ sureties, American Home Assurance Company and Zurich American Insurance Company, asking that they immediately assume Watts’ contractual duties or pay monetary damages in the amount of the bond. Attached to this press release are copies of the Termination Letter and the letter to the sureties.

On February 12, the city sent Watts a Default Letter notifying Watts of its defaults under the construction contract and of Watts’s opportunity to correct those defaults. Notwithstanding Watts’s repeated assurances that it would correct the defaults, substantial progress has not been made and the correction of significant defective work remains. The work includes correction of the following:

• water infiltrating the building and failure to protect the roof;
• Installation of the lobby glass walls (the “curtain wall”) assembly and the parapet walls and use of certified welders to perform the structural welds;
• Access flooring installation that assures its structural integrity;
• The fire escape stairways to meet building code requirements; and
• Insufficient personnel and resources to complete the project.

“The Termination Letter and the letter to the sureties were issued only after many opportunities had been given to Watts to correct the various defaults,” said Donna Leong, the city’s Corporation Counsel. “Unfortunately, Watts did not address the defaults by taking necessary corrective actions and did not provide sufficient resources and personnel to correct those defaults. The city is taking this action because of Watts’ continuing delays, as we need to complete construction of the JTMC.”

Watts began work on the JTMC on April 29, 2015, and was required under the contract to complete the work on June 14, 2017. Out of the more than 110 reports issued to Watts for non-compliant work, about two-thirds remain uncorrected. A new construction completion date has not yet been set by the city pending a response from the sureties. The JTMC project site has been secured by the city. Workers needing to retrieve their tools will be allowed to do so by appointment made by their company with the Department of Transportation Services.

Background:
The Joint Traffic Management Center (JTMC) is a city and state collaboration to improve traffic management on O‘ahu among five agencies: the City and County of Honolulu’s Department of Transportation Services (DTS), Honolulu Police Department (HPD), Honolulu Fire Department (HFD), Honolulu Emergency Services Department (HESD), and the State of Hawai‘i’s Department of Transportation (HDOT). The JTMC is located at the corner of Alapa’i Street and King Street in Kaka‘ako.

—PAU—