Failed Ross County Jail project demonstrates need for responsible contracting policies on projects funded by Ohio taxpayers.

The Chillicothe Gazette’s latest report on the $5.5 million Ross County Jail Project opens with a lesson in responsible bidding for Ohio taxpayers and public officials: “On the same day a Ohio taxpayers firm voluntarily defaulted on the $5.5 million Ross County Jail project, they also defaulted on at least two other taxpayer funded multi-million dollar projects.”

From the March 8, 2019 Gazette article:

“Palmetto Construction’s decision to quit the Ross County Jail job came about four months after the project’s original due date and two months after it submitted a proposal with $3.2 million in changes the commissioners rejected.

The Gazette has confirmed Palmetto quit three public projects — including a fire department and a state park project — with combined costs of over $14 million and about $5.6 million already paid to Palmetto.

A lawsuit from Palmetto’s bonding company, however, alleges Palmetto defaulted on six projects on Feb. 6 but it does not specify the projects. The suit also alleges Palmetto has been fraudulently transferring or selling property to protect it from collateral claims.

At least two other public projects ran into problems with Palmetto’s subcontractors not being paid, leading one — the Ohio State University — to fire Palmetto. The Ohio Attorney General’s Office also has confirmed they “have been working on construction cases involving Palmetto.””

“This project is a perfect example of why cities and counties should have stringent responsible contractor policies using responsible contractor language, as we have recommended to may public entities,” said Mark Johnson, Business Manager for the Tri-State Building and Construction Trades Council.

According to the Gazette, Palmetto has left a trail of unpaid subcontractors and workers, as well as unfinished public projects and clients who found themselves burdened with construction delays and change orders. In addition to the Ross County Jail, the Gazette identified the following troubled publicly funded projects:

  • The new $5.1 million Hocking Hills visitor center. According to the Gazette, “Jeff Westhoven, chief of program services for the Ohio Facilities Construction Commission, said about 60-65 percent of the project is complete and the state has paid $2.9 million.”
  • A $3.7 million firehouse in Truro Township which “voters in Franklin County are paying for with a 2.5-mill tax levy.” Because the new station was left half-constructed, the Gazette reports that “all operations have been consolidated into the department’s second station.”
  • Columbus City Schools’ $4.5 million enrollment center renovation. The Gazette reports that so far, “five subcontractors have filed liens on the project, according to district spokesman Scott Varner, and the district is withholding its 2% final payment.

Ohio Farmers Insurance, which holds bonds on these public projects, filed suit against Palmetto on Feb. 19 in Medina County Common Pleas Court. The Gazette reports that the suit lists 40 project bonds with 16 still open including:

“Alterations of Licking County offices on East Main Street in Newark; a “pray and play” park in Delaware; a picnic pavilion in Urbancrest; renovations for the Dublin Service Center; administrative building work for Southwest Licking Local Schools; an equine facility project at Rickenbacker International; erosion control for the City of Fishers in Indiana; and a “buildout” at the American Museum of National History for the Columbus Downtown Development Corporation.”

Responsible contracting “does not mean accepting the lowest bid, but the most responsible bid offered at the lowest price,” said ACT Ohio Legal Counsel Rob Dorans. “A responsible contracting policy enhances Ohio’s competitive bidding laws, and emphasizes value in the procurement process.”

Research from the Midwest Economic Policy Institute shows that Responsible Bidder Ordinances improve outcomes on construction projects. Responsible contractor criteria includes:

  • Proper experience and safety training
  • Drug- and alcohol-free workplaces
  • Apprenticeship training
  • References and financial condition
  • Compliance with regulatory agencies
  • Proper licensing, insurance, and bonding
  • Accident and illness rates
  • Compliance with the Fair Labor Standards Act and the State of Ohio Public Works Construction laws and regulations.

ACT Ohio advocates for responsible contracting policies, ensuring contractors have a record of completing high-quality construction projects while providing working Ohioans with living wages and benefits. Contact info@actohio.org or call 614-228-5446 if you have questions or concerns about responsible contracting policies.

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