Overdue Bills Paid; Airport Walkout Threat Appears Over

Payment of nearly $1 million in overdue bills in the past few days apparently has averted a threatened walkout by subcontractors working on the new passenger terminal at John Wayne Airport, both sides in the bitter dispute now say.

On Jan. 19 more than half a dozen subcontractors, led by the Covina-based Avance Engineering excavation firm, said they might stop work on the terminal unless they received payments for work done in November from the general contractor, Taylor Woodrow Construction California Ltd. One subcontractor, Rich’s Concrete Pumping of Escondido, removed all but a skeleton crew from the construction site before receiving a payment.

Since their threat on Jan. 19, the subcontractors say, they have received payments on November invoices except for money owed on numerous change orders issued for the project.

Some change orders, which involved redesign efforts or changes in the types and amounts of building materials used, expanded subcontractors’ workloads and resulted in supplemental bills to Taylor Woodrow.

Cost-Cutting Effort

The terminal project is part of a $310-million airport expansion program that has been controversial since last summer, when officials acknowledged that Taylor Woodrow’s winning bid to become the general contractor was well over the $42 million the county had budgeted. An ambitious cost-cutting effort is expected to save about $10 million, but just last week the Orange County Grand Jury cautioned that the terminal may not be completed by the planned April 1, 1990, opening date.

Also last week, Taylor Woodrow project director Chris Elliott denied that the firm was unduly late in paying subcontractors.

“We have reviewed our files and are unable to locate any outstanding, unpaid subcontractor invoices which predate the November, 1988, pay period,” Elliott said. “It is correct that certain subcontractors have claimed payment for extra work. . . . To date we have not received approval . . . for payment of any extras, due in part to the failure of certain of the subcontractors to properly document and describe their claims.”

County airport project coordina tor Alan Murphy said his own review also showed that Taylor Woodrow “is now current” on its payments to subcontractors but that invoices for extra work performed as a result of change orders are still being processed.

The county must review the invoices for extra work before payment is authorized, with payments of $25,000 or more needing approval by the Board of Supervisors, a process that can take 2 or 3 months.

The delay in processing change orders, which potentially could cost the county more than $1 million, has caused some subcontractors to claim economic hardship. But county officials say Taylor Woodrow’s contracts with the county and with subcontractors make it clear that payments might be delayed 60 days or more. Therefore, they say, the subcontractors should have known that they might have to carry significant overhead costs, including their own work force payrolls, for 2 or 3 months at a time.

Reasons for Rejection

County records obtained by The Times show that nearly every proposed change order--and there have been dozens of them so far--has been rejected for lack of sufficient documentation from Taylor Woodrow or the subcontractor involved.

For example, when Taylor Woodrow proposed substituting one type of public address loudspeaker for another, the original proposed change order contained no price information from the supplier.

Another change order, for extra plumbing work, was rejected because HPV, the consulting firm hired by the county to manage the airport project, said the prices cited by the subcontractor were too high, by more than 30%.

“The lack of documentation has been a serious problem,” Richard Begley, HPV’s project director, said recently. “In some cases we have never received a response when we asked for additional information.”