Feds Clear Main Street Project; It Won’t Be Ready For 2017 Centennial Or Carnival Celebrations

ST. THOMAS — U.S. Department of Transportation’s Federal Highway Administration (F.H.W.A.) has given the Virgin Islands Department of Public Works the clearance to move ahead with the beleaguered Main Street Revitalization Project in Charlotte Amalie, following a letter F.H.W.A. sent to local officials that placed the project in jeopardy, as questions about the legality of the performance bond obtained by contractor Tip Top Construction came to the fore.

“Fortunately, we have resolved the issue of federal funding for the Main Street project,” D.P.W. Commissioner Gustav James said during a 30-minute press conference at Government House here this morning. “Note that in this case work was not halted on the project because we were always confident that the facts were clear, well documented and that these facts would result in the federal government’s concurrence that the project is eligible for federal funding.”

Mr. James said, however, that the project would not be completed before the 2017 Centennial celebrations, or the 2017 Carnival in St. Thomas. He said the contractor had been given about 520 days to complete the work, and reminded that the delays began during the de Jongh administration.

Feeling vindicated, Mr. James took at swipe at the feds, stating that he had never been challenged in such a manner, especially when the contract, he said, clearly outlined the terms of the agreement.

“Let me just say this about Main Street. This is unprecedented for me in my experience, to have a project challenged like this, about certain things that are clearly spelled out in the documents, as if there’s no one reading,” he said, later adding, “However, I think we have gone beyond that point and hopefully we won’t have to revisit this.”

A letter from F.H.W.A. dated November 7 and addressed to Property and Procurement Commissioner Randolph Bennett and Mr. James, stated that federal regulation required that all contracts exceeding $10,000 shall contain suitable provisions for termination by the state/territory, including the manner by which the termination will be effected and the basis for the settlement. The payment and performance bond provides suitable provisions to meet this requirement. The contract executed for the Main Street project required a payment and performance bond from the contractor, according to the letter.

But F.H.W.A. said it understood then that the payment and performance bond was contingent on a “teaming agreement” between Tip Top Construction and Prestige Construction, and argued that such a contingency was not acceptable since it was not disclosed during the bid package and was not approved by the Virgin Islands Department of Public Works during the award process. “In addition,” the letter continued, “Prestige Building Company is not a signatory nor an approved sub-contractor for this contract.”

Mr. James had long disputed the federal government’s interpretation of the bonds, telling The Consortium last month that F.H.W.A. had misread the agreement.

“They misinterpreted what a bond is,” Mr. James said of F.H.W.A. “A bond is an insurance issued by a surety company, and in this case there are two bonds, payment bond and performance bond, which were issued on behalf of Tip Top Construction with respect to the Main Street Project.” Mr. James said the bonds are binding upon Tip Top and the surety company, and remain in force until the full contracts Tip Top has entered into with the U.S. Virgin Islands are completed and satisfied. “And that’s a fact,” he added.

On Thursday, Mr. James said, “We would like the people of the Virgin Islands to understand what happened and to understand that this project is being managed in accordance with the law and in accordance with established standards for bidding and fair competition.”

In his closing remarks, Mr. James said Tip Top Construction was the low bidder for the project. Fair bidding practices were also discussed, according to Mr. James, which he says ultimately benefits the public and the government.

Mr. James encouraged small contractors to contact the Disadvantaged Small Business Enterprise to D.P.W. to understand the process and qualifications for bidding on projects available in the territory.

Feature Image: Department of Public Works Commissioner Gustav James.