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Main Street contractor sues city of Montesano

The contractor behind the Main Street Phase II improvements in downtown Montesano has filed a lawsuit against the city of Montesano, seeking about $400,000 in back payments and damages.

The lawsuit claims “breach of prompt payment” and “breach of contract.” The downtown paving project was funded by a state grant. The lawsuit, filed on Dec. 30 in Grays Harbor Superior Court, alleges that contractor South Bay Excavating performed all of its necessary duties, but the city has simply not paid its bills in a timely manner.

The Olympia-based contracting firm won the contract with a low bid of $958,000 to do the project, which ripped up a large swath of Main Street and rebuilt it from the ground up. The project took place mainly in the summer, although there were some delays that stretched it into early fall.

City officials were not happy with the performance and the City Council went so far as to reject all of the bids for a different public works project — when South Bay appeared to have won that contract with the lowest bid — in an effort to, hopefully, work with a different contractor.

In turn, an official with South Bay Excavating appeared at a council meeting in November to explain that the delays were not the fault of the contractor, but of poor engineering done by the city’s contracted engineer. An engineer also responded at the council meeting that they did nothing wrong.

The lawsuit was filed by the Seattle law firm of Ahlers & Cressman, working for South Bay Excavating. The lawsuit alleges that the city “failed to comply with the requirements of the project specifications regarding payments for measured quantities.”

“By failing to submit timely requests to Washington State Department of Transportation, the city has waived the condition precedent to delinquency of payments under (state law) that it receive reimbursement from the grant or federal government 30 days prior to disbursing payment to South Bay.”

“South Bay has performed its obligations under the contract, including submitting timely pay applications to the city,” the attorneys write.

The Vidette filed a public records request last week with the city of Montesano seeking more information on the case. As of press time, the city had not provided any documents.

City Administrator Kristy Powell says the city had planned to meet with South Bay on Monday. City Attorney Dan Glenn said Monday night that he knows about the lawsuit, but needed time to review its contents.

The lawsuit also alleges that the city of Montesano has refused to pay for material that South Bay Excavating purchased, despite the terms of the contract.

The lawsuit seeks $172,439 to cover the unpaid costs of materials, $198,315 for unpaid contract payments, plus interest at a rate of 1 percent. The lawsuit also seeks attorney fees.