Rail Line Electrical Firm Is Released

An electrical subcontractor working on the Los Angeles Metro Rail project was ordered off the job Friday for operating without a license, and for allegedly failing to pay prevailing wages and fringe benefits, transit officials said.

The subcontractor, PIE Construction Co. of Van Nuys, had been installing electrical conduits at two downtown station sites for the $1.25-billion, 4.4-mile-long rail line since last September without a license, according to Southern California Rapid Transit District officials, who discovered the problem about two weeks ago.

In letters to be mailed next week, RTD plans to inform two prime contractors responsible for hiring PIE Construction that it was withholding about $200,000 in payments pending the results of investigations by the state Department of Industrial Relations and the U.S. Department of Labor, RTD spokesman Greg Davy said.

Quality Not Questioned

“The main contractors are in charge of making sure that the licenses of their subcontractors are current, and that they are working legally and safely,” Davy said.

Davy said the quality of the work, subject to constant inspections, was not in question, and one of the prime contractors involved said no delays are expected because of the dispute.

“This is the first time we’ve run into a problem with licensing,” added Mel Polacek, construction manager of Metro Rail. “Contractors should be licensed and they should pay prevailing wages.”

Davy said $188,000 in payments were being withheld from prime contractor Guy F. Atkinson Construction Co. of South San Francisco, which is building a station at 5th and Hill streets. Davy said another $35,000 in payments were being withheld from Tutor-Saliba-Perini of Sylmar, which is constructing a station at Wilshire Boulevard and Alvarado Street.

“The prime contractors are responsible ultimately for any penalties levied on them because of their subcontractor’s problems,” Davy said. He added that any construction delays at the sites resulting from the problem with PIE Construction also would be paid for by the prime contractors.

Said Misunderstanding

Gregory Park, 48, president of PIE Construction, said that although his electrical contractors license has expired, the problem was the result of a misunderstanding. Park added that he had paid some of his electricians less than prevailing wages of $29.24 per hour, but said he did so on the advice of prime contractor Atkinson. Park denied, however, that he ever withheld fringe benefits from one of his employees.

“We are going to fight RTD,” Park said. “Atkinson Construction said we could pay $27.79 (per hour). But we started paying $29.24 when the question was raised about two months ago.”

“I feel terrible,” added Park, whose firm was certified by RTD in 1985 as a Disadvantaged Business Enterprise, enabling it to better compete with larger companies for contracts. “Instead of helping me stand up as a minority businessman, they are stepping on me.”

Atkinson spokesman Bob Rucker refused to discuss the allegations until his company could review RTD’s letter. However, Rucker said: “We have terminated PIE Construction’s right to proceed under the subcontract . . . and we’ve asked him to respond to us regarding these allegations.”

Ron Tutor, president of Tutor-Saliba, angrily disputed RTD’s decision to withhold so large an amount in payments.

Called ‘Overkill’

“He (Park) is a small electrical subcontractor on one of our jobs whose license lapsed,” Tutor said. “It’s hard to fathom that a lapsed license is worth a $35,000 fine. . . . Talk about overkill.”

Fred Vogt, who was fired from PIE Construction May 16 after three months on the job, has filed a formal complaint with the state labor authorities contesting the termination. In the complaint, Vogt also alleged that PIE Construction failed to pay him an estimated $2,959.92 fringe benefits, plus 18% a month interest.

“I’m 60 years old, I know my trade and I know exactly how much I have coming to me and what a prevailing wage job is,” said Vogt, whose 23-year-old son, Rick, was fired the same day and is seeking an estimated $5,059.78 in fringe benefits and back wages. “I don’t think it was fair.”