This school construction project’s cost has jumped by $800K – and keeps rising

Fresno Unified has abruptly canceled a $9 million contract to renovate Figarden Elementary School after construction has already started, citing concerns about school board president Brooke Ashjian’s conflicts of interest with local contractors.

But Ashjian is pointing the finger back at the district, saying an expected increase in the project’s cost – including an additional $800,000 that’s already been incurred – is due to district leaders’ own ineptitude.

“The cost did not rise because of me. It was the school district’s inability to manage contracts. It had nothing to do with me,” Ashjian said. “It’s on them. They’ve known for a year that potentially there could be a problem, and they just now stopped it.”

At a special meeting Tuesday, the school board voted to terminate a contract it signed with Bush Construction in May 2016 to add classrooms to Figarden Elementary, citing a “termination for convenience” clause. Termination for convenience clauses are common in construction contracts and allow for projects to be canceled for reasons that may not be the contractor’s fault. Ashjian abstained from voting, as he has for several months on other construction projects.

The district says that terminating the project before it’s finished creates a significant cost for taxpayers, but that it’s “the most prudent action” because of the conflict of interest.

“After careful and thorough evaluation, and in the interest of consistency and fairness, we recommend the board terminate the contract,” Fresno Unified interim superintendent Bob Nelson said in a statement following the meeting, at which there was little discussion about the matter. The potential conflict over the Bush contract is whether Ashjian should not have voted initially in 2016 to hire the company, given his past work with the firm.

This is not the first problem the district and Ashjian have faced with the Figarden Elementary project. Last year, the school board voted to reject all bids from contractors and start over on the project after Ashjian’s Seal Right Paving was listed as a subcontractor for Lewis C. Nelson and Sons – the construction firm that had been awarded the job.

Ashjian said he was unaware that his company had bid as a subcontractor for the project. The district ultimately re-bid the project, citing concerns it violated conflict of interest laws. The project went from costing $8.5 million in January when it was awarded to Lewis C. Nelson and Sons – the lowest bidder – to $9.3 million in May, when it was awarded to Bush Construction.

“The additional $800,000 project cost appears to be attributable to a combination of factors, including the need to reject all the original bids and re-bid,” former superintendent Michael Hanson said in a memo to trustees last year.

Hanson said that if the rebidding hadn’t been necessary, $800,000 of public bond money could have been used to buy new playground equipment for 10 elementary schools and new air conditioning at rooms in two schools.

But Ashjian said he is not to blame. He pointed to a prior dispute between the district and Lewis C. Nelson and Sons over the project’s start time. He says the district could have opted to pay $250,000 – a price the construction firm submitted as a claim for a delay in the project’s start time – instead of $800,000, but chose to re-bid anyway.

Ashjian said Tuesday’s decision to terminate the Bush contract was also unnecessary, and that the district’s purchasing department needs to be replaced.

“In my mind, there’s no conflict. The decision they made is purely emotional. They didn’t have to do it,” he said. “I’ve changed the superintendent. Now, we’ve got to fix purchasing. One day at a time … Let’s get back to people who understand business, and not administrators.”

Ashjian was a vocal adversary of Hanson, who was terminated without cause in January.

Now that the contract with Bush has been terminated, it’s unclear how the remaining construction plans at Figarden, which is in Ashjian’s northwest Fresno area, will be handled.

“In the near future, we anticipate presenting a new contract for board consideration. The goal is to ensure the least possible disruption to our school community, and provide quality facilities to enhance the learning environment,” Nelson said.

This story was originally published June 27, 2017 at 9:31 PM with the headline "This school construction project’s cost has jumped by $800K – and keeps rising."