TO: AC Transit Board of Directors
FROM: Aimee L. Steele, General Counsel/Chief Legal Officer
SUBJECT: Contract Amendment for Outside Counsel
ACTION ITEM
AGENDA PLANNING REQUEST: ☐
RECOMMENDED ACTION(S):
Title
Consider authorizing the General Manager to execute an amendment to Contract 2022-10480 with Herrig & Vogt, LLP, adding $500,000 to the contract through the term of December 31, 2026, for legal services related to disputes arising out of the construction of the East Bay Bus Rapid Transit (BRT) Project.
Staff Contact:
Aimee L. Steele, General Counsel/Chief Legal Officer
Body
STRATEGIC IMPORTANCE:
There are no strategic initiatives associated with this report.
The BRT has been operational as the Tempo (or 1T) line since August 2020. The District has been engaged in active and potential litigation pertaining to delays in completion of the Project. Outside counsel was procured in November 2021 to assist in the handling of litigation and potential litigation. In August 2023 the Board approved settlement with the prime contractor O.C. Jones & Sons, Inc., to resolve delay claims alleged against the District. The District continues to seek recovery from third parties for delays not attributed to the District. This active and potential litigation continues to date.
BUDGETARY/FISCAL IMPACT:
Approving the contract amendment will increase the funds available to pay legal fees and some expenses by $500,000. To date $3,151,121.03 has been spent on legal fees and some costs/expenses. The District has offset some of these costs / expenses through settlements that have occurred to date and continues to seek an offset of additional costs and fees through the continued third-party claims and litigation.
BACKGROUND/RATIONALE:
The BRT project was implemented in three Construction bid packages. The first two construction bid packages were successfully completed and closed out without any claims. The third construction bid package with a $108 million initial contract award went into construction in the first quarter of 2017 and after multiple extensions, began operations in August 2022. O.C. Jones and its primary subsidiary, Mike Brown Electric (MBE), asserted damages related to project delays. In August 2023, following two rounds of mediation, the Board approved a settlement with O.C. Jones, which resolved the contract delay claims of both O.C. Jones and MBE. The District has asserted multiple delays in the project are attributed to various third-party entities and, with the assistance of outside counsel, is seeking to recover those amounts.
ADVANTAGES/DISADVANTAGES:
Authorizing the General Manager to execute an amendment to the contract will ensure the District can seek maximum recovery for project delays that are attributed to other parties. The disadvantage is the cost of litigation or potential litigation against multiple parties.
ALTERNATIVES ANALYSIS:
The Board could choose not to extend the contract with outside counsel and effectively end the District’s attempts to recover from third parties. This is not recommended as significant time and expense has been invested to date to attempt to recover from third parties.
PRIOR RELEVANT BOARD ACTION/POLICIES:
SR 23-256
SR 25-117
SR 24-549
Board Policy 465 - Procurement Policy
ATTACHMENTS:
None.
Prepared by:
Aimee L. Steele, General Counsel/Chief Legal Officer
Approved/Reviewed by:
Aimee L. Steele, General Counsel/Chief Legal Officer