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California University Terminates Major Local Firm For Project Delays

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Courtesy of the University of California at Santa Barbara
Ocean Sciences building is running late, says the University of California at Santa Barbara.
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The University of California at Santa Barbara last month terminated Melchiori Construction Co., a firm that says it was the area's biggest general contractor and construction manager, from a $6.5-million building project.

Because the project, started in March 2010, remains unfinished and "the contractor is many months behind schedule," the university state that it has also "made demand" of Western Surety Co., a Woodland Hills, Calif.-based company that supplied performance and payment bonds for Melchiori.

In news reports in Santa Barbara, subcontractors have complained about late payments and disputes with Melchiori. The state Contractor Licensing Board cited the firm once in March and again in April for failing to pay a subcontractor, but Melchiori has disputed the citations.

An attorney for Melchiori, Kristine Mollenkopf, says that general contractor-subcontractor disputes are common.

in the case of the university building the school is to blame for delays that she says have put Melchiori in the position of acting as the "financier." The university has unfairly withheld about $2.5 million from Melchiori covering work required by a blizzard of change orders, she says.

Instead of paying or granting schedule delays to the contracting team, "the university would rather sit back and say the contractor is hundreds of days behind because" the contract provides for $2,000 a day in liquidated damages, says Mollenkopf.

"The university has made voluminous changes and signed change orders and instructed work to proceed," she says, but has made no payment since last summer. The university wants to argue about the percentages of completion and "that's bogged down the payment process," adds Mollenkopf.

A university spokeswoman said the project from which Melchiori was terminated was a new Ocean Sciences Education building but she could not confirm its construction status.

Melchiori completed a project for Santa Barbara County in February and is on schedule to finish another one in June, according to Celeste Manolas, a county project manager.

According to the company website, Melchiori Construction in its present form was founded by Ugo Melchiori in 1988. The company has performed many construction and renovation projects in the city and county over the years, including the renovation of the Four Season Biltmore Hotel. "From 2003 to 2008, Melchiori Construction Co. grew steadily and became the largest commercial construction and construction management firm in the Santa Barbara area," says the firm.

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