New Contractor Found to Replace Fired Firm in Finishing Campus : Education: Cal State San Marcos officials hope that 1992 opening will remain on schedule despite having to change builders in mid-project.

A new construction contractor for Cal State San Marcos has been found, and university officials were hopeful Friday that work will resume and that the university will open as scheduled.

The optimism came after a meeting with officials of Reliance Surety, a bonding company, at which university officials were told that a new general contractor will take over for the financially plagued Louetto Construction Co.

“They are still working out an agreement with the takeover contractor, and we’re going to try to re-establish operations within two weeks,” said Al Amado, assistant vice president of campus construction for Cal State San Marcos.

A subcontractor on the project, however, said that negotiations with a new contractor and remobilization could take more than four weeks, a difference that Amado said is critical.

“It’s critical enough to warrant getting another contractor” who would get on the job faster, Amado said. A replacement contractor “would surely be a direction that the university would push for,” Amado said. “We don’t have time to waste.”

Replacing subcontractors is another option to speed construction, Amado said.

University officials say they are beginning to prepare contingency plans for a semester-long delay.

“So far we are assured that we will be able to get it open as scheduled,” said university Vice President Dick Rush. “However, in all honesty, we have begun to look at contingency plans on a ‘what if’ basis. But we are still going forward on the clear assumption that we will open in 1992.”

Options include leasing more business park spaces or moving into the campus mid-semester, which Rush conceded could turn into a logistic nightmare.

Amado would not name the new general contractor because of negotiations, but he did say that it is a San Diego county-based operation.

Work at the Cal State San Marcos site came to a halt in September when Louetto Construction missed two payments to a subcontractor totaling $1.3 million. That subcontractor, and up to 10 others, filed stop-notices against Louetto for failure to pay and walked off the site, Amado said.

Reliance, as Louetto’s bonding company, is responsible for completing the work on time and under contract specifications, Amado said. The deadline for the project’s first phase is Sept. 12, 1991, and for every day that the project is late, Reliance must pay the university as much as $4,000, Amado said.

Furthermore, any extra costs incurred to finish the project on time, such as overtime and hiring extra crews, must be paid by Reliance, Amado said.

“That’s something that the bonding company has to evaluate if it’s less costly for them to pay a fine or less costly to have people working double-time to meet the schedule,” Amado said.

Reliance officials could not be reached for comment.

“We’re hoping to have a re-established schedule within a couple weeks, and that would be affected by the new on-coming contractor to determine how fast they can perform,” Amado said.

Amado said the first task will be for Reliance Surety to make payments to C.W. Poss, the grading subcontractor.

Those payments, which had been $1.3 million, have ballooned to “in excess of $2 million,” said a C.W. Poss official, because of damages from the work stoppage and demobilization as well as a third missed payment.

“We’re so up in the air right now,” said Robin Hartnett, project manager at C.W. Poss, saying the company would have to negotiate a new contract with any general contractor brought in to take over the project.

Hartnett said it could be more than four weeks before construction resumes, depending on how quickly a new contractor is brought in and how smoothly negotiations with subcontractors progress.

University officials’ optimism Friday that the campus could open on time contrasted sharply with their comments Thursday, the day after Louetto was fired from the project.

“We have used up all of our contingency time, so, if everything can go on schedule in a streamlined effect, we can still open on schedule. The possibility of that happening, however, is low,” Amado said Thursday. “With every day that passes by, the possibility increases that we won’t be able to open on time.”

Without the buildings, the university, which is now housed in a San Marcos business park, might have to trim student enrollment from 3,500 to 2,500, Amado said.

The Cal State San Marcos project was one of three public works projects that Louetto Construction was fired from during October. On Oct. 11, the North County Transit District ordered Louetto off a $6.7-million renovation of the Oceanside bus maintenance yard for reportedly improper installation of underground fuel tanks.

Last Tuesday, the city of Escondido fired Louetto from a public park project for purportedly failing to pay subcontractors and suppliers about $270,000.