LYNN – The Water and Sewer Commission is poised to yank a $1.8 million contract from a Saugus firm over claims that KGCI Inc. has not paid a vendor assembling the commission’s 254-foot-tall wind turbine tower.
“The contractor obviously has a cash flow problem,” said commission attorney Samuel Vitali.
Commission and KGCI representatives were to meet as early as today to discuss ways to keep the contract from falling apart, including a potential plan to pay $60,000 owed the tower assembler in two installments.
Even if the contract quarrel gets resolved, water and sewer operations director Robert Tina said it will still take six to eight weeks to assemble and install the turbine next to the sewage treatment complex off Commercial Street. Tina said KGCI originally agreed to erect the structure last September.
“The contractor is in default by over six months,” Tina said.
That statement stands in contrast to language Tina used to describe the commission’s decision in 2011 to award the turbine bid to KGCI, a firm with an office located in a Route 1 office building.
“They met all the bidding requirements. A lot of due diligence was given to checking them out and they checked out,” Tina said.
Commission Director Daniel O’Neill, in a letter published in the Item in January, stated that KGCI has “considerable experience” assembling turbines at six Massachusetts locations. The company was the low bidder among six firms submitting bids ranging up to $3.3 million.
On Monday, O’Neill speculated that KGCI “might have underbidded” the turbine project.
A man who answered the firm’s door Tuesday referred calls to project manager Steve Theran. Theran could not be reached for comment on Tuesday but Tina said KGCI representatives have indicated the firm is “at odds” with the tower manufacturer.
Tina has been the Water and Sewer executive spearheading for seven years the design and construction of a wind turbine capable of producing electricity to meet Water and Sewer’s needs.
He said KGCI’s bid requirement called for the firm to arrange for other companies to build the turbine’s parts – namely its tower, motor and giant blades – and arrange to have a Rowley crane company assemble the part.
He said KGCI successfully arranged to have the turbine’s foundation construction and underground electrical supplies hooked up. The firm also arranged for the turbine blades to be manufactured and the tower manufacturing work appeared to be well on its way, Tina said, until about three weeks ago when Middleborough-based Vertex Fabrication and Design informed the commission that it was not releasing the tower to Water and Sewer until the firm received payments from KGCI.
“That is when it all fell apart,” Tina said.
Water and Sewer attorney Samuel Vitali said Vertex has helped to partially ease the impasse by indicating it could take partial payment for the tower work followed by a final payment. He hopes differences with KGCI can be resolved over the next week.
The commission required KGCI to buy a performance bond as part of the bidding conditions and Tina and Vitali said a Pennsylvania-based firm will take over the turbine project and see it to its finish if the impasse with KGCI is not resolved.
“I’m very disappointed in this company,” Tina said.
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