The Police/Court building has seen plenty of controversy recently with revelations from the Auditor General that the firm donated money to the Progressive Labour Party and that it had been paid $6.5 million without any supporting evidence. But an investigation by The Royal Gazette now reveals that the building site on the Church/Court street junction was fraught with difficulties throughout 2008.

The Police/Court project building has been a major source of controversy recently — but documents seen by this newspaper show independent experts repeatedly flagged up serious concerns from day one.

Why Landmark Lisgar was chosen for the project also remains a mystery.

Landmark Construction, set up in 2001, certainly wasn’t one of Bermuda’s biggest firms.

It eventually finished the new $2.8 million bus terminal in Hamilton in early 2006.

A relatively simple project, it came in more than half a year late and $400,000 over budget, according to press reports at the time. A retaining wall that partially collapsed had to be rebuilt and strengthened.

Lacking the financial wherewithal to land a job the size of the Police/Court project, Landmark needed to team up with a bigger player to bid.

So it partnered with Canadian firm Lisgar in a joint venture and the partnership was one of two companies to put in tenders for the Police/Court building in September 2007.

Landmark/Lisgar wanted $6.9 million to produce a building for the guaranteed maximum price of $66 million, while Apex Construction Management Ltd. wanted $6.65 million to produce the building with a guaranteed maximum price of $69,717,000.

However a letter from architects Carruthers, Shaw and Partners (CS&P), who had been on the project since its conception in the late 1990s, to Government on September 21, 2007, said Landmark Lisgar had neglected to submit the required elemental breakdown form, making their bid “informal”.

The instructions to bidders clearly stated the contract would be awarded to the most responsive bidder — which was Apex Construction Management Ltd. because their bid was “complete and also the most responsive.”

As well as submitting the required details, it included a performance bond of ten percent of the tender amount, guaranteed by Butterfield Bank.

The CS&P letter concluded that Apex Construction Management was the only bidder who satisfied the bidding requirements for the job so it recommended Apex.

However, then-Works and Engineering Minister Dennis Lister over-ruled that advice, and that of Government’s own architect, and instead plumped for Landmark Lisgar.

In his special report Auditor General Larry Dennis has questioned whether Cabinet had been kept in the dark when it picked Landmark Lisgar for the job, after technical staff had picked the other bidder.

The Cabinet memo which recommended Landmark Lisgar did not mention errors in the Landmark Lisgar bid.

Mr. Dennis’ report said the Ministry’s project manager had expressed concern about Lisgar’s experience after visiting facilities Lisgar had constructed which were nothing like the Police/court building.

But the firm was on the job and ground was broken in December 2007 — just days before the election, which was no coincidence according to Mr. Dennis’ the Special Report released by Auditor General Larry Dennis earlier this month.

When the excavator hit soft soil in January 2008 there was surprise, which raised the suspicion in some quarters that LLC and the excavator had not read the soil report.

But insiders claim the original report by Shaheen and Peaker was accurate and had shown hard rock on the south side which needed to be hammered out and a possible need for 50 piles — but only if another test showed they were necessary when they had reached the required depth.

Tensions rose with local engineer Entech, hired to supervise excavation, when it began revising the contract.

Entech concluded not all the 46 piles were required as LLC began eliminating them without written consultation. Eventually a reduction from 46 to 20 was sanctioned.

A March 12, 2008 letter from Halsall Engineers Consultants, of Toronto, from Michael Buckley, Project Principal, expressed grave concerns over “what appears to be Entech’s unilateral decisions to change the principle of the building’s structural design” including the deletion of piles and revisions to foundation design.

The letter said piles, which are driven into the ground for maximum stability, had been chosen because there were expected voids below the founding elevation. Putting spread footings, which spread the load at the bottom of columns, was deemed “unacceptable”.

Mr. Buckley added that Entech was promoting a change not only in the structural design but in the architecture.

Unauthorised design changes were becoming a constant flashpoint in site meetings.

LLC was told to rip out the elevator core, which was a storey high, because it was not properly founded. LLC had poured cheap slurry into an old water tank instead of digging it out.

A letter from Frank Cheng, project consultant to Halsall Engineers Consultants, of Toronto, on October 1, 2008, said the sand underneath that foundation was unstable and needed to be removed.

A computer modeling analysis said the uneven pressures would have caused the elevator shaft to lean and would have warped the floors.

It concluded: “The previously constructed unapproved elevator pit base is unacceptable and must be demolished.

“It would be inadequate to support the loads from the buildings and would over-stress the sand deposit at the bearing level.”

So the slurry was dug out and the lift put in according to the drawings.

One source close to the site said the delays over the piles and lift shaft cost the project three months.

And there was pressure from those on site to ‘value engineer’ — e.g. look for ways to do it cheaper.

But architects felt there was no need to cut corners on what was supposed to be a quality building that had a budget designed to cover the original specifications — with $3 million to spare.

There were complaints Landmark Lisgar had insisted in placing a crane in a location which was bound to interfere with the ramp.

The crane erected was taken from another job and turned out to be a dud. Another crane was flown in but it was placed too close to one of the walls for it to be built easily.

Landmark Lisgar lobbied for the release of funds as they had no working capital. Because progress had been so slow, the architects had only agreed to pay fees on work done but Government caved to pressure from Landmark Lisgar and agreed to pay ‘straight line’ which divided the funds over the time allotted.

A letter dated July 18 from Sam Spagnuolo, Associate CS&P architects letter to Government’s Chief Architect raised concerns about the construction managers’ monthly project status report and said LLC’s approach seemed to have been formulated “with the aim to increase their profitability through the reduction of time and money at the detriment of the project”.

It went on: “Landmark Lisgar has repeatedly chosen to differ from the contract and standard construction practice, ignoring direction given by both the Architect and the Structural Consultant Halsall Engineering, hired by the owner.”

Landmark Lisgar had not excavated to the required depth, said Mr. Spagnuolo in his letter.

He added that Landmark Lisgar seemed to have misunderstood its role as the contract said they were not design/build contractors, they were construction managers and so must build what was specified.

That did not entail “finding savings” or substituting in “inferior quality products to save themselves time and money at detriment to the quality and surety of the project”.

The letter added: “LLC does not demonstrate that they have the construction, the schedule or the site under control.

“In 45 years of practice, CS&P have never encountered a situation where a contractor or construction manager has knowingly proceeded with work contrary to the contract.”

Particularly significant was the magnitude and nature of the change to the contract, said the letter, and the fact that it was made after due warning had been provided the consultant team and the owner.

“Contractually, LLC were acting as Design/Build contractors, looking to save millions of dollars by not following what they were bound to build under their contract as Construction Managers.”

A stinging memo from Government Architect Christina Kokosky dated August 15, 2008 detailed, at considerable length, the various contract breaches. They included:

l A ten percent performance bond was supposed to be in place three days before official site start up date of January 21, 2008 said the memo. But the first draft of a bond was received 40 days after that and it did not meet the local legal requirements.

l A work schedule was received on April 1, 2008. It was supposed to be ready 21 days after contract award — but in fact it was given 118 days after contract award and set alarm bells ringing.

The memo said schedule revisions submitted in August 2008 indicated severely delayed activities as being ahead of time.

The original schedule showed excavation occurring over 50 days with completion by March 18, 2008, whereas the revised schedule indicated a 115-day period with a completion date of June 4, 2008.

Ms Kokosky’s memo said a graphic implied some work was ahead of schedule, whereas excavation along the western boundary had not even started.

It added: “According to the contract, the construction manager must seek permission from the architect to revise any baseline schedule items. The architect was not consulted on the revisions to the schedule for critical path activities.”

The litany of complaints did not end there. She wrote: “The original critical path schedule identified 139 days to complete the core structure; whereas the revised schedule has increased this time by approximately another three and a half months with an allocation of 234 days.

“The owner finds the completion date of April 25, 2008 for all steel erection (including decks and box beam formwork) unacceptable.”

Nearly a year on the structure is still not complete.

Ms Kokosky’s memo said LLC had presented a revised schedule that bottlenecked later subcontractor activities which presented “a very constrained construction site from October 23, 2009 to the substantial completion date of August 8, 2010 and beyond.

“It appears that the Construction Manager will not be meeting the Contract Substantial Completion date of August 8, 2010 as deficiency stage activities are scheduled until October 25, 2010.”

The letter noted LLC had failed to submit a contract breakdown by major sub-contractors despite requests from November 2007 to February 12, 2008 — then said they would not do it.

The letter revealed that electrical and mechanical subcontractors said not been paid and there was a long list of work done without consultation with Government.

It added: “Certain decisions made by the construction manager have undermined the consultant team’s confidence in their abilities and the consultants question the construction manager’s motivation.

“An appropriate example illustrating this is the Constructions Manager’s decision to found six storeys of structure at Elevators 1 and 3 on concrete rubble and a partially demolished underground water tank, this caused the consultant team and the owner undue stress with respect to the Construction Manager’s ability and the subsequent potential threat to public safety.

“The Construction Manager vacillated on whether they were going to comply with the requirement for exterior waterproofing on the Water Tank, which was probably a major cause of the delay to this area of work.

“As a result of the under-excavation the Construction Manager was forced into a time-consuming waterproofing installation in order to meet the requirements of the contract documents.

“After installing what appeared to be at least 50 percent of the waterproofing, the Construction Manager vacillated yet again on the waterproofing and forced their position by involving the Minister in the decision to eliminate the waterproofing.”

Other blunders listed in the memo included:

l Builders ignored warnings given by the Architect and the Corporation of Hamilton not to drive concrete delivery trucks along the Court Street hoarding line. As a result a concrete truck fell into the excavation and damaged the foundation wall.

l Builders did not take advantage of the opportunity when Belco and the Corporation of Hamilton were trenching the street to order the street sanitary and water connections, “in spite of being asked by the owner’s representative if this matter had been looked after”.

Tempers were beginning to fray. CS&P sent a letter to Government which showed LLC would be overpaid by $5 million by August 2008 based on work done.

A letter written from the project architects CS&P to Government’s chief architect Lawrence Brady on August 26, 2008 expressed “great concerns with us as to the capacity and capability of Landmark Lisgar to complete the Magistrate’s Court and Hamilton Police Station”.

It said: “Every progress application submitted by LLC has been beyond the scope of work completed and remains un-certifiable by us.

“To date payments paid out are in excess of work completed totaling $5.3 million with current Progress Application submitted for $1.7 million.

“All fees currently paid out are not commensurate with the remaining project time line, and actually reflect an overpayment of the work completed to date.”

And the letter demonstrated serious concern about the management of the project.

It said: “Landmark Lisgar has been unable to perform or demonstrate that they are capable of completing this project on time or on budget.

“The disorganised sequence of construction, incoherent or contradictory, performed in a disparate manner and altered continuously, follows no logical order or accepted industry norms.”

It said the sequence of work was not reflected in LLC’s scheduling, exacerbating the ability to understand and monitor the schedule — defeating its purpose.

It went on: “The inadequacy of this tool creates a perilous situation, which degrades the ability of the team to proactively problem solve. It also removes the ability to cohesively discern the impact of the schedule on the project entirely.”

And the rush to make out that the project was working was causing further problems claimed the letter.

It said: “LLC is behind schedule and, under pressure to show progress, is using several techniques to recover and support their required ‘appearance’ of action on the site with negative repercussions to the project.

“Acceleration is a second technique being used, which is destructive in the critical and costly errors it entails.

“It is being used in the ‘office portion’ of the project and elsewhere — no sleeves have been provided for mechanical piping, electrical piping is not cast in walls, placement of crane base encroaches on the sheer wall making it impossible to pour.

“The timeline for this project is 30 months. At ten months into the project completion, the work is ten percent complete. The consultancy fees are based on the contract 30 months.

“At the current rate of construction the projected timeline could be two or three times those contractually agreed to.

“In this scenario the Government of Bermuda will incur additional consultancy fees of proportional magnitude, fundamentally because of the shortcomings of the Construction Managers.”

Some claim there was talk within Government of firing Landmark Lisgar and bringing in Apex. But Apex not brought in. Instead the decision was to axe Lisgar and leave Landmark in place with a new partner who was not to be disclosed.

Experienced building project manager Eddi Henri would come in to run the project and Conyers and Associates would take over from CS&P and the Works and Engineering chief architect.

In October CS&P, a firm which had designed countless Police/Court buildings all over Canada was asked to settle and get out. They worked on until the date of termination in December 2008.

The departure of Lisgar was not that amicable. There had been tensions between the two partners on the project from the start.

Observers said political pressure led to the decision to start putting the steel up, after months of being little more than a hole in the ground. It caused clashes with the Lisgar wing arguing doing things out of sequence would not help the project.

And the overseas partners wondered why it was so difficult to get a piece of the road for storage — only to be billed thousands of dollars to tinker with the sidewalk and then see much more space be given up when they had left the job.

And there were rows about pressure to put ill-trained workers on the job in some instances rather than highly-skilled technicians needed for a building of that quality.

Insiders said tensions between the two companies in the partnership grew but with Lisgar gone there was more of the management fee to share around.

Questions also remain about how Landmark were able to buy-out Lisgar’s shares in a deal said to be worth around $1.5 million.

Throughout 2008 the project hemorrhaged cash, despite its well documented delays.

The Budget Book, released in February, shows Government had budgeted just over $6 million for the Police/Court building for 2008/09 but the revised estimate puts spending at more than twice that — $15,017,000.

Yet by January the project was four months behind schedule by Government’s own admission.

And yet some of the managers were on large sums. Senior Project Manager Patrick Smith, who was brought in some months after the job started, was getting around $28,000 a month.

Landmark Lisgar claimed expenses to Government for a $14,500 Honda SUV for fellow boss Dan Hall because he didn’t want to ride a scooter. He was paid around $24,000 a month until he left the project in late 2008.

Now there is a slightly different team on the job and since those changes Government has claimed the project will be complete by its target of 2010 — and will be on budget.

But if that date is missed the taxpayer, already burned over Berkeley, will wonder how Government allowed the same mess to happen again.