City files #036;1.9M suit

Published 12:00 am Wednesday, December 17, 2003

Suffolk News-Herald

One year after terminating its contract with Virginia Marine Structures Inc., the original company hired to build bulkheads and piers at Constant’s Wharf, the city is suing the company’s bonding agent.

The lawsuit, filed Tuesday in Suffolk Circuit Court, demands that Fidelity and Deposit Co. of Maryland honor the $1.93 million performance and payment bond it signed off on in June 2001. According to the suit, the terms of the bond indicated that the city would only be entitled to the money if Virginia Marine failed to adhere to the contract.

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Virginia Marine began working on the Constant’s Wharf project in August 2001.

According to the suit, the city identified several problems with VMS’ work during the next year: &uot;substandard workmanship, deviations from contract specifications, and failure by VMS to take appropriate actions as required by the contract and requested by the city.&uot;

The suit went on to allege that VMS was &uot;unwilling to cooperate with the city and was not willing to meet or even attempt to meet its obligations under the contract.&uot;

Also, the suit indicated that a city investigation showed that VMS had materially breached its contract with the city. That determination prompted the city to terminate its agreement with the Virginia Beach-based construction company on Dec. 17, 2002.

In February 2003, city leaders notified Fidelity of VMS’ material breach of contract and indicated that the city was entitled to bond payout to complete the project.

Thus far, Fidelity has refused to make any payments to the city, according to the suit.

A Fidelity representative could not be reached, largely due to time constraints, on Wednesday.

Meanwhile, work is progressing on the waterfront park and marina that will be adjacent to the city’s Hilton Garden Inn and Conference Center.

In October, the Suffolk City Council approved spending $3.1 million in city money to finish the project. At that time, City Manager Steve Herbert said he expects the city would recover all of its additional investment.

Early last year, the city awarded a contract to a Portsmouth firm, W.F. MaGann Co., to complete the project. The project is expected to be finished in May 2004.