NANTICOKE – Luzerne County Community College’s board of trustees voted Wednesday to ask Precept Associates to renegotiate its construction manager contract. The board also agreed to take legal action seeking to void the document should the firm refuse.
The vote was based on solicitor Joseph Kluger’s determination that the terms of the controversial $1.6 million contract went beyond the scope of the resolution the board passed on June 12, 2007. That resolution approved Precept to oversee construction of the Public Safety Training Institute and renovation of the Kanjorski Center into a Health Science Center.
Citing the potential for litigation, Kluger would not provide details of how the document differed from the resolution.
But a reading of the contract shows the document provides for Precept to be construction manager for projects other than the PSTI and Health Science Center, even though those two projects were the only ones the board approved Precept to manage.
A document entitled “exhibit A” in the contract details a general time frame for completion of various aspects of the PSTI building, which has five phases of construction. But it also includes a note delineating “additional phases” at the bottom of the page.
That note contains the phrase “any and all future amendments to the master plan.” The master plan includes the creation of a culinary arts center in addition to the PSTI and Health Science Center.
Construction experts who previously reviewed the Precept contract at the request of The Times Leader said that note means that Precept would be the construction manager for all construction projects within the master plan, not just the PSTI and Health Science Center.
The discrepancy between the resolution and contract was not detected until now because no one from the college reviewed the document before President Tom Leary signed it on May 18, 2007 – one month before the board officially approved it.
Problems with the contract first came to light earlier this month after The Times Leader reviewed the document and discovered the terms differed significantly from typical construction manager contracts.
Among the key issues was Precept’s fee of 8 percent of the total project cost. Construction experts have said the fee for a project this size is typically 2 percent to 5 percent of project cost.
Other provisions within the contract allow Precept to add expenses into the project cost – including fees charged by the architect and its own management fee – that are not included in standard construction manager contracts, the experts said. That will increase the company’s profit because it is based on the project’s total cost.
Leary has conceded the procedure by which the Precept contract was approved differed from other contracts, which are reviewed by the college’s business manager and solicitor before they are signed. No one has offered an explanation as to why the Precept contract was handled differently.
Luzerne County Commissioner Greg Skrepenak, who sits on LCCC’s board, acknowledged Precept’s president, Robert Higdon, remodeled a room in a home Skrepenak previously owned several years ago. Skrepenak and Higdon have said they know each other casually, but are not friends.
The college has also been criticized for failing to seek bids from other construction management companies. Officials maintained they did not have to seek bids because construction management is a professional service that is not subject to state mandated guidelines that require purchases over $10,000 be bid out.
While acknowledging it does not have to bid out professional service contracts, the board on Wednesday announced it would do so for all future construction manager contracts.
Kluger said after the meeting he plans to contact Higdon or his attorney today to discuss reopening the contract.
Higdon, contacted on his cell phone Wednesday night, declined to comment on the board’s vote.
Precept, of Hanover Township, has already been paid $611,446 for overseeing construction of the first phase of the PSTI building. It was not clear Wednesday whether the college would seek to recoup any of that money, or what aspects of the contract it would seek to renegotiate.
Kluger said the board would not comment further due to the potential for litigation.