Coogan Construction responds to coverage

Posted: Sunday, December 02, 2007

Regarding the recent report and editorials on the Thunder Mountain High School, facts are being overlooked in favor of hyperbole. The Empire stated that the city is "paying Coogan Construction as much as $700,000 extra to finish on time." Coogan disagrees with the Empire's statement.

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In section 00700.4.3.7 of Coogan Construction's contract, the city of Juneau assumed the risk of unusually severe weather. Consequently, Coogan never included any contingency for this item in its bid. With 16 feet of snow, last winter was the most "unusually severe" in Juneau since 1943. Therefore, the city owed the resulting costs to Coogan and the job was delayed 60 days.

Coogan submitted a bill for $1,163,000 for allowable costs, including costs to overcome the delay. Coogan's bill included no money for a completion incentive. After weeks of negotiation, Coogan conceded to settle its bill for $700,000. The city then demanded that $500,000 of the settlement will be paid only if Coogan overcomes the 60-day delay. In other words, the city successfully negotiated a $463,000 discount off allowable costs while still getting the job done on time. Moreover, the city nimbly used the money it already owed Coogan as an incentive to get the job back on schedule. This was clearly a good stroke of business for taxpayers; city staff should becommended for their handling of it.

Furthermore, if Coogan fails to complete the project on time, it not only loses part of its settlement but it also faces daily penalties. Coogan is making every effort to recapture the schedule and, if this winter is normal, expects to finish on time. City and Juneau School District staff are continuing to work with Coogan to accomplish this goal.

Finally, Coogan Construction publicly invites the Empire to review the files to verify any of the facts stated in this letter, or any other facts for that matter. Taxpayers can be assured that every penny is properly accounted for and the project is being run tightly by the city in a professional manner.

Wayne Coogan


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