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PA: Contractor defaults...work stopped on Findlay Connector

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Construction on the southern two and a half miles of the Findlay Connector, which will connect US 22 to PA 60 and the Pittsburgh Airport, has ground to a halt recently. The reason, the contractor, Smith and Johnson, was declared in default by the PA Turnpike commission as a result of Smith and Johnson's financial woes. See article in today's Post-Gazette.

Smith and Johnson was awarded the contract to build Section 54C which runs from US 22 near Bavington to just north of Bald Knob Road. The contract included interchanges at US 22 and Bald Knob Road. According to the Post-Gazette article: Section 54C is 65 percent complete while Sections 54A and 54B are 77 and 76 percent complete, respectively. Most of the troubles began in the fall. And although a bridge carrying Candor Road over US 22 was demolished in late January, Smith and Johnson was pulling out from the construction site. On January 18, the Turnpike Commission offered the company a chance to right the ship, but those efforts failed and the Turnpike declared them in default on February 8.

Problems in addition to falling behind schedule include shortpaying or not paying at all their subcontractors and suppliers.

This would be the third major project in two states that Smith and Johnson has pulled out of. In September of 2005, Smith and Johnson halted work on a six mile segment of a 50 mile highway called the O'Bannon Expressway in Southern Indiana. Citing unanticipated $3,000 fuel costs and began a tussle with Indiana over who should pay for the additional costs.

According to this WISH-TV news story from September 15, 2005:
Indiana Department of Transportation officials said the contractor is bound by its contract to complete the job for the price it bid and that the state has no policy for allowing fuel-cost escalations. "This is very unusual. This hasn't happened anywhere else (in the state) this year," said department spokeswoman Afua Anokwa.
The company also stopped work on a US 231 project in Rockport, Indiana at the same time. The company, as a result laid off 30 employees.

It appears that this was a ploy to get INDOT's attention. Bob Johnson, general superintendent for S &J, said in a September 16, 2005 issue of Land Line Online that it was standard procedure for other partners to absorb part of the cost.
“There is sort of a standard they’ve used in other states,” he said. “The contractor absorbs the first 20 percent. Then after that, the governing agency or the contracting agency usually helps out with the fuel cost.”
The state ordered them back to work and they obliged.

However, according to today's article...it appears the company has gone out of business.
"As far as we know, they closed down the highway construction side of their business," Mr. Agnello said. "Basically, they're out of business."
As this develops, more will be reported here.

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