BARNEGAT – Construction on the long-awaited Barnegat Municipal Building is resuming following an agreement that includes stringent oversight arranged by the insurance company that issued the performance bond for the work.
This development comes after months of delays and setbacks, which led the township to terminate its contract with Frankoski Construction Co., Inc. (“FCC”), effective September 25, 2023.
Simultaneously, former Mayor John J. Novak, who serves as Barnegat’s special counsel for the construction project, initiated a performance bond claim with Travelers Casualty and Surety Company of America.
FCC and Travelers representatives subsequently joined Barnegat officials at the construction site to conduct preliminary inspections and develop a plan to complete the project. Novak negotiated a settlement agreement with the contractor and the insurance company, putting the work back on track.
Notably, the settlement agreement does not involve a takeover by Travelers, nor is Travelers dominating or controlling the contractor in any way. Instead, it is an accommodation by Travelers to help mitigate the cost of completing the project.
Barnegat has agreed to temporarily rescind its termination of FCC to complete the project. However, the reinstatement of the contract was conditioned on retaining a project manager.
The individual(s) in this role will coordinate and oversee all work by FCC and its subcontractors at the project site full-time. A number of additional responsibilities include coordination with the project architect, addressing punch list issues, and communicating with township officials regarding project milestones.
“At no cost to Barnegat, Travelers has retained Vertex Construction Management Company to run and oversee the project,” said Novak. “Vertex is one of the largest construction management companies in the United States.”
Township Administrator Martin Lisella reported that the Vertex project manager commenced work at the job site on November 1. Lisella said the individual doing the oversight has committed to overseeing progress for the next year.
The new anticipated date for finishing the building is June 2024, which is just one month short of two years from the initially expected completion date.
Phase II of the project cannot be initiated until the building is completed. Phase II involves tearing down the existing town hall and other site work.
Photo by Stephanie Faughnan
If township officials reasonably believe that there is inadequate progress by FCC one month after the execution of the settlement agreement, Barnegat can terminate the construction contract. The township would then have the right to pursue a new performance bond claim.
“We are only paying what we agreed to in our contract,” Novak emphasized. “Minus what we’ve already paid plus change orders where we’re only paying as agreed.”
Novak added that bringing FCC back into the project will guarantee that all the materials and supplies previously contracted with FCC will maintain their original pricing. Additionally, Novak remains hopeful that subcontractors who worked on the job will return upon receiving reassurances from the project manager regarding payment and disbursement of funds to them.
The goal is to avoid the potential risks associated with engaging new subcontractors, who might critique the existing work – demanding additional time and financial resources for the potential redoing of the tasks.
“We don’t want someone saying that they have to start all over again,” summed up Novak. “Travelers doesn’t want that either – they’re taking over responsibility to get the work done.”
Barnegat has confirmed that $2.8 million in contract funds and retainage is still available, including two change orders. Under the terms of the agreement, Barnegat committed to making monthly payments to FCC without any withholding or set-off for liquidated damages or incurred damages unless FCC failed to provide the contract-required services.
“John Novak has always been one of the biggest proponents of the new municipal building,” said Mayor Pasquale “Pat” Pipi. “Especially the upgrade to police headquarters.”
Pipi said that Novak’s legal experience and passion for the project proved to be instrumental in the township reaching an agreement with the contractor and the insurance company to get the work done.
“I look forward to moving all of our offices into the new building,” Pipi added. “And providing our police department with the state-of-the-art facilities they deserve.”
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