Mount Rose I-83 contractor facing new $14K daily penalty
The contractor for the Mount Rose Avenue interchange project on Interstate 83 could end up in administrative court over its dispute with the state Department of Transportation about cost overruns and missed deadlines, a state official said Friday.
Cherry Hill Construction Inc. of Jessup, Maryland, is eight months overdue on an already extended deadline from PennDOT to finish the interchange, and now state officials expect construction to continue into next year.
"I think this project has become the exception to the rule," said state Sen. Kristin Phillips-Hill, R-York Township. "As we look at the other projects in close vicinity to this project, they seem to be working well."
As of June 30, the contractor had accrued $2.2 million in penalties for missing deadlines, said Mike Crochunis, spokesman for PennDOT.
As of Friday, an additional $14,000 daily penalty was set to kick in the following day, this time for missing the deadline to remove the reduced speed zone.
PennDOT first charged Cherry Hill on Nov. 12 with a $5,825 penalty for each day the project remained overdue.
Then on Feb. 10, when Cherry Hill missed the deadline for completing a detour for the I-83 southbound on-ramp, PennDOT added another daily penalty of $4,885, Crochunis said.
Crochunis confirmed Friday that Cherry Hill filed a notice of claim with PennDOT in April over disagreements about the contractor's liability for missing deadlines and about the penalties incurred since November.
Leonard White, field office coordinator for Cherry Hill Construction, could not be reached for comment by phone Friday.
Per the law, PennDOT has 120 days to make a decision about the claim.
If Cherry Hill disagrees with the decision, the company will have 15 days to bring an appeal to a state board.
The Board of Claims is an administrative body of three board members who have exclusive jurisdiction to determine the outcome of claims filed by contractors against the commonwealth, said Jeffrey Smith, an attorney and chief administrative judge on the Board of Claims.
After a claim reaches the board, the two sides have an opportunity to negotiate a settlement, which Smith said happens often with the cases heard by the board.
But in this case, if Cherry Hill and PennDOT don't reach an agreement, and if the project continues to stall, Phillips-Hill said the contract could end up in default.
"I think that could have its own challenges as well, because we’d have to go back through the bidding process and almost start all over to get this project going again," she said.
If PennDOT uses the full 120 days to make its decision, and Cherry Hill is unhappy with the outcome, the two parties could begin the Board of Claims process in late August or early September.
Phillips-Hill said Cherry Hill Construction should no longer be considered a qualified bidder in the state of Pennsylvania.