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StumbleMGM Mirage, Perini trade new charges in CityCenter lawsuit
Monday, June 7, 2010 | 9:33 a.m.
Sun Archives
- MGM Mirage to pay CityCenter subcontractors soon (5-26-10)
- MGM Mirage seeks CityCenter subcontractors meeting (5-25-10)
- MGM Mirage, Perini spar over CityCenter after Gibbons meeting (5-21-10)
- New group enters dispute between MGM Mirage, Perini (5-20-10)
- MGM Mirage says it’s working on CityCenter subcontractor claims (5-14-10)
- Gibbons to meet with builder over CityCenter (5-10-10)
Sun Coverage
Attorneys for MGM Mirage's $8.5 billion CityCenter development on the Las Vegas Strip and general contractor Perini Building Co. are trading new charges in the massive lawsuit over nearly $500 million in alleged unpaid construction invoices and construction defects.
CityCenter, which was sued for nonpayment by Perini in Clark County District Court in March, said in court papers last week it wants to pay the subcontractors but is having difficulty sorting out their claims since Perini hasn't provided all the information it needs to make payment decisions.
CityCenter's position in the lawsuit is that its claims for construction defects at the Harmon Hotel and elsewhere at CityCenter may exceed Perini's $491 million claim. Nevertheless, CityCenter says it's working to get the subcontractors paid while it litigates its issues with Perini.
In court papers, attorneys for CityCenter say MGM Mirage faces an enormous task: sorting out the claims of first-tier subcontractors, of which there are more than 220, and hundreds more lower-tier subcontractors. The contractors billed Perini, and ultimately CityCenter, more than $5 billion.
"For CityCenter to determine how much is actually owed to the subcontractors requires a detailed accounting reconciliation, on a subcontractor-by-subcontractor basis, of the amount already paid to each subcontractor and the amount still owed," the CityCenter filing said.
"By engaging in this subcontractor close-out process, CityCenter is performing the role of the general contractor without all the resources and historical information that is ordinarily available to the general contractor," the CityCenter attorneys said.
They said the company has 65 employees including accountants, engineers and project managers working on the process but now needs Perini's payment logs, check registers and other documents reflecting payments to the subcontractors.
"CityCenter is finding that in many cases the amount that a subcontractor claims to have been paid by Perini is different than the amount CityCenter paid Perini on behalf of work performed by that subcontractor," the company attorneys wrote.
Despite these problems, CityCenter said in its filing last week that it's made substantial progress in closing out the subcontractor claims and had reached a tentative agreement with one subcontractor with meetings scheduled with several others.
But attorneys for Perini said CityCenter attorneys have gone overboard in their document requests and that CityCenter hasn't committed to actual deadlines for payments to the subcontractors.
"There are millions and millions of documents related to the construction of the CityCenter project," Perini said in a filing last week. "However, not everything about the project is in dispute in this litigation and certainly not every document is relevant to the issues that are actually in dispute. Nevertheless, CityCenter's proposed (lawsuit) case management order requires the parties to undertake the enormous cost, expense and time involved in disclosing every single document that has any relationship at all to the project ..."
Perini also complained that CityCenter has proposed a process for payment of subcontractor claims that "does not actually do anything to expedite any payment to subcontractors or any determination of amounts due."
"Whereas CityCenter's proposal requests that subcontractor claims should be submitted to a (court-supervised) special master, that special master does not have any power to require any payment of such claims. Instead, the special master only has the power to prepare a report that will ultimately be presented at some unknown future trial date to the trier of fact.
"Under CityCenter's proposal, no payments will be made to the subcontractors until after final adjudication of all claims (and possibly until after final resolution of all appeals). The subcontractors cannot wait that long to receive payment for their work and such proposed procedure is simply unacceptable," Perini said in its filing.
Perini charged that CityCenter's proposal amounts to a violation of due process for the subcontractor claims since the special master would submit recommendations on payments to the "trier of fact" and that trier must approve or reject the recommendations with no provision for the parties to present their claims and defenses.
"There are no actual deadlines involved," Perini added. "CityCenter provides no deadlines or even guidelines as to when any future events may take place and when the matter can be presented to trial."
Perini proposed its own case management order that calls for the subcontractors to receive a "prompt determination" on whether their claims will be paid pending final resolution of the Perini-CityCenter lawsuit.
Under Perini's three-track plan, the first track involves claims agreed to by Perini and subcontractors. Perini proposes to identify these contractors by July 9 and within 45 days after that CityCenter would pay 60 percent of their claim, with the other 40 percent held in escrow. The other 40 percent would be paid by Dec. 3 if all parties agree those subcontractors are not implicated in construction defects.
Where Perini and the subcontractors disagree on the amount owed, the special master would have until Oct. 6 to determine how much should be paid.
Lower-tiered subcontractors to the subcontractors would be paid by the main subcontractors the same percentages the main subcontractors receive. If there are disputes between the subcontractors and their subcontractors, the amount in dispute would be placed in escrow pending resolution of the disputes.
There are provisions to exclude immediate payments to subcontractors implicated in construction defects at the project, with the special master determining how much they should be paid pending resolution of the lawsuit.
Perini proposed that a trial begin in September 2011 on Track 2 construction defect claims. Between now and then, witnesses would be interviewed and evidence would be gathered and examined.
Under Perini's plan, a Track 3 trial would be held in September 2012 for remaining claims that would likely be significantly affected by decisions in Tracks 1 and 2.
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MGM is spending more money on lawyers than paying the subcontractors. Many small contractors have gone out of business because of the delays! A plague to MGM!!
What about the over-payments made to first tier subcontractors who made excessive profits on the project, are these being looked at or collected in this process?
Here would be a good example, an operations manager and superintendent of first tier contractor formed shell companies under their wives maiden names and used other contractor's to bill and be paid millions in payments for change order work where the amounts should've of been much less. Would it be feasible to collect to let these be?
What people are failing to understand is that a project of this size and the amount money spent in a short period of time, first tier subcontractors can devise ways to earn extra revenue where the system is flawed. After all construction is feast or famine and when profits can be made and nobody is doing checks and balances like the federal government does on change order work, the criminal elements in this industry will usually take what they can and leave town or quit their jobs and move to another company.
Perini will get paid for their work and MGM will pay where entitlements can be proven and only in amounts the contract allows. All others, I for one hope no payments are made and the first tier contractor learned a valuable lesson, follow the contract on your next job and you'll be paid.
Wow... I actually side with Perini on this part. Subs should get 60% to cover their expenses and payrolls, then the 40% should be held in escrow in an interest bearing account. Once the case is resolved, the subs will get their 40%, plus the interest earned. Sounds fair.
Isn't the amount in question already the amount held in escrow until all disputes are resolved? I hate MGM, but they should hold the money back until Harmon gets the rest of its floors back.
When an earlier Las Vegas Sun article last month implied that MGM Mirage wanted to pay the sub-contractors quickly, I posted that this would a great thing for Las Vegas, as the money would be flowing to the subs and on down the line in June.
How naive I was to believe MGM Mirage. It now appears that the earlier article was no more than a public relations gimmick to deflect negative press for a while.
Although it is possible that the MGM lawyers are the villains here, it is more likely that MGM Mirage is the liar and never had any intention of paying anyone quickly.
MGM/Mirage is stalling. Perini was the main contractor on the project and they hired many of the sub-contractor and they are responsible for paying sub-contractors not MGM/Mirage. MGM/Mirage is trying to out flank Perini. MGM/Mirage should not need records from Perini because they should of been paying Perini not the sub-contractors' directly. Its sounds to me MGM/Mirage did not keep very good records of money going out which only make me believe that maybe all the money to finance City Center was not going to the project. If MGM/Mirage is no happy with some of the construction or the projects have some defects, then why did you open before correcting these problems. The City Center project stinks from the start, finance problems, cost over run, contractors no being paid, problems with constructions, but yet City Center opened. The quicker MGM/Mirage pays Perini the quicker MGM/Mirage can get on with the business of running a first class resort.
Subs shouldn't get a dime until they can prove their entitlement; this is the rule book of the game when they signed the contract.
Perini has a valid point when the subcontractor can provide prove of their revenue and substantiate all costs and revenues billed for the entire project where change order is the source of the revenue. If contract work and work meets the product MGM hired them to provide, then MGM should pay, otherwise, no payment should be made.
I for one would like to see 18 USC 1020 apply to all subcontractors on this project, it wouldn't be the least bit surprising to see many subcontractor employees and managers go to prison.
Perini is a big boy and knew what they were getting into when they signed on to this project, its industry standard to claim everything and pick the battles in the end. MGM and Perini both know what's in store for all parties involved, MGM will give, Perini will give, and subcontractors who prove payments are due will be paid, those who don't know payment will not be made. This is the game played in this industry, we know, we accept it, some contractors just spend their money like its candy and they expect money to flow down the pike for them to continue their frivolous spending lifestyles. Maybe they shouldn't have bought the fancy boat, cars for all their family members, expensive jewelry, cabins, adult toys, etc" etc... the list goes on and on, they deserve to be broke and stay out of this industry.
PS: Quit assuming the contractor's paid all their bills or employee's out of their pocketbooks. Most of the contractors on the project can afford to cash flow project disputes; the ones who can't should not have signed a contract or should have thought about this before signing a contract. If you can't play in the kitchen, get out of the business. Work within your company needs and quit your sniveling and whining. It is the rules you agreed to when you signed the contract, now live by it and accept the fact that you might not have followed the contract change order notice requirements and document control requirements to substantiate your billing. It are these contractors that have ruined our industry by not adhering to the contract documents and bid work too cheap or refused follow the contract by not hiring the personal to manage the work. Owners in this industry are cheap for the most part; they expect to make millions and want to pay nothing for rewards. It's about time these owners get weeded out of the industry and leave it to reputable owners.
I disagree that MGMM is at fault here. If a subcontractor has not been paid, it's the General contractors responsibility to provide the correct documents to the Owner for payment. Period. If the sub went ahead with work simply based on an OK from Perini, they have a problem. If they have a signed approval from Perini, then Perini must have received an approval from MGMM. Simple.
Now if the sub has a claim of "delays" or "interferences", this is a totally different animal. These claims take forever to adjudicate, many are inflated, and are usually lacking documentation. And the claims usually show up at the end of the project. Gee, I wonder why.
I blame the General contractor. They signed up the subs, they controlled their work. If the subs did the work with the old promise of "do the work now, we'll catch up with you later", then sorry Mr. Sub, you were the fool.
As they used to say in Texas "My handshake is my word, better than money". And as a 30 year contract administrator/manager, I used to reply "Great, wonderful, now please sign right here". Learned the hard way that BS only goes so far. Hope MGMM plays hardball.
@its2hot. Once again you open mouth and insert foot. Were you on the City Center Job?
Did you know we didnt have stamped drawings until Nov 2009?
Did you know that for 5 years the drawings all said "Not For Construction" ?
You talk like City Center was like every other job. YOU are wrong, completely different. Ive been doing electrical work for 14 years and have never seen such a design nightmare.
That being said Perini assumed they could sit back and let the subs handle everything, we did. I believe what your animosity represents is your inability to cash in on strip work because you are non union, I think your reasons for wanting to see the subs lose money is hopes they will go bankrupt and you can just move on in, lol. You have shown your self serving selfish colors.
I aint mad at ya, remeber whatever you wish on others, comes back ten fold on you.
mgm has given campaign contributions to MANY clark county judges, i hope anyone going up against them checks to see if THEIR judge is on the take.
What a nightmare! Roll the clock forward another 2-3 years before this is settled and whom ever is left will get 40 cents on the dollar.
I wasn't out in the field sweating my butt off. I was in the office. Handling the billing for a first-tier sub and let me tell you, this was the biggest cluster you know what ever! Constant changes to procedure. Submitting forms and reports with the same information in five different ways. We were provided a list of what we could bill for and what we couldn't and how it was supposed to be done (and it had better be EXACTLY right!). And all of these directives were given to us by Perini who was directed by MGM. It was a pain for all of our vendors and suppliers as well. And if we didn't get something EXACTLY right our monthly pay application was deducted for that amount. We were required to submit a copy to Perini and provide another copy for MGM. So now they're saying they don't have access to the historical information? That's total bull. You should see the amount of paperwork generated for this job just from one sub. I can only imagine what the entire project over all those years generated. And this was supposed to be a LEED project! Tell me MGM, how many trees did we end up killing in the end? We did the job. We didn't have any construction defects. We haven't billed over our contracted amount. So pay us already so we can stop worrying about our jobs. Not all of the contractors on this project are underhanded and billing for illegitimate costs. The MGM has an issue with Perini? Fine. Go to court and hash it out. Give us a check for our costs incurred due to your stupidity and love of redundancy and we'll see you on the next project.
Once again Lectrouda you take off shoe and insert foot. It must be difficult swallowing when foot is inserted so deep. Remember, when somebody is stupid, stupid can't be fixed.
I understand fully about The City Center project, a lot more than you'd ever know. Yes the plans were not approved nor issued for construction purposes when contracts were signed. What don't you understand about contracts and what is required of the subcontractor to comply with at all times? The contract just in case you've never read this project contractual obligation, including the main contract between Perini and MGM and the subcontract you worked under.
Surely go ahead take that mindset of yours and do whatever it takes to build a project regardless of cost or how payment for services is going to be made. Just because Pat, Sheldon, Jeff, Mark, or any other manager said to do it, does not relieve the subcontractor of the contract responsibility. Just because they said it was so surely doesn't mean it to be true. Again, revert back to the contract and what is required of all subcontractors to comply with before assuming, oops we know what happens when people assume now don't we, who is the fool now?
I for one know firsthand, we were paid all but 1.5 million in retention, the remaining $145,000,000.00 we're paid timely and in full, including retentions and change orders (PCO's) just in case you forgot. The difference is we followed the contract verbatim for block A, B, C, D, Veer, Mardian, VDARA, Podium, Theater, and Central Plant. We will be paid the remaining 1.5 million, remember we followed the contract. We have signatures from all parties before work started, if not, no work was done. We eve stopped work when payments were late and on more than one occasion. Tishman or Perini has no choice or our worked stopped. The tail didn't wag the dog, the dog wagged the tail.
I love it when contractors or contractor employees know more than anyone else or takes on the mindset we have to get it done or we won't get more work. Isn't the theory behind owning a business making money? or are you telling me that you ran your work with the let's all be friends mindset and do whatever it takes and hope like hell payment will be made. If this is the case, bless you, you deserve not being paid and going broke or if you're an employee, I'd fire you in a heartbeat minute for not following the contractual obligations you where hired to provide in the first place.
It is the schmuck contractors that have ruined it for us who follow the contract and understand what costs verses revenue is and what the contract requires us to follow. I love seeing these schmucks go broke and getting out of our industry hopefully after this depression is over with, they won't resurface and I pray that MGM sticks it each and everyone that failed to comply with the contract, is what we can an earned consequence of stupid owners and their employees and they deserve exactly what they'll get, nothing
Once you change the contract, it is no longer valid. That place was not and has never been built to specs. How can you follow the original project when you have an office full of engineers changing everything at the last second? Im talking smoke control, one of the most vital systems for a building. Tell me its2hot? As for Perini, they didnt know sh t they relied on us for their information. Not everything is as simple as some metal studs and sheetrock, and even then that can be a pain in the ass when the engineers continue to change smoke zones or they create notification zones completely different from the original smoke zones and all the walls are finished. We were writing so many T&M tickets, each with a PCO, that we needed a full time+ employee to keep up with the paperwork. We were working up to 20hrs a day, sometimes under 10 different PCO's, so how exactly does the original contract figure in? Go ahead enlighten me, when you start with A and by the time you get to the end the place has turned to B, how exactly does the original contract apply? It dont, its called Cost+, its called design build, and its barely allowed to be defined as that according to the State Contractors Board.
Your a typical POS, as long as you get yours F everyone else. I feel sorry for your kids. : )
Pay the subs what they have coming, consider the Harmon disaster a tradeoff against any money owed Perini, and everybody move on.
First, I love this site. You are all crazy. MGM is making money by holding out on paying subs basic retention. Is2hot, you have no idea what your talking about. Demolition subs still are owed retention. It has nothing to do with following contracts.
Anyway, there is definitely fault everywhere. However, if MGM really wanted to pay subs and close out it could be done very quickly. That simply isn't the case.
FYI, Harmon is an insurance claim. It has nothiing to do with paying money owed on the other 18 individual projects.
Lectrocuda:
Once again, what do change orders and changes have to do with following the contract? Remember, once a contract is signed the rule book defines the rules of the game, thy who knows the rule book best wins the game 99% of time. The contract is just that, a guideline that expects changes to be made, the main contract must be followed or changes won't be paid.
If a contract was signed, you have PCO's signed, these are called potential change orders, not change orders or Perini Change Orders, they're simply potential change orders. You still have to follow the contract change order notice requirements and provide the legal documents to be paid. Perini's signature didn't mean squat, it had to be signed by a duly authorized representative of Tishman and MGM before becoming a change order to the contract and then be cycled through Skyar before payment are made.
Who cares how many people were cramming changes down into the field, the contractual obligations still had to be met; again revert back to the contract and what is required before spending money on changes, simple to do. The NRS and courts clearly uphold the contract notice requirements and how payments will be made and who pays for the work. If it required a subcontractor to staff the project with 1000 project engineers to keep up with their contractual obligations for payments to be secured, then that is a direct cost to change orders and should've been done. It about making money, not friends and surly following the contract documents.
You also had had to provide and prove the proper notices were followed pursuant to NRS revised status throughout the entire contract scope, this include every penny being sought after. Peel Brimley is a good place to learn about the NRS and what rights are afforded under contract construction law if one is confused, they're top notch in their field of practice, and we use them.
Failure to comply with any provision of the contract and payments are withheld as a result of that is a learning experience that many will learn the hard way. Hopefully after all said and done, those who survive this will become a better contractor afterwards and provide services verbatim to the contract documents. Now the playing field is leveled out and prices lowball contractors provide and poor services provide are a thing of the past. Those who don't perfect, less schmucks for us to deal with when the economy get better.
Is2hot, what are you talking about? First of all its "Skire" not "Skyar". From the way you talk, you never actually read the master agreement between MGM and Perini. I'm guessing from the way you talk you are some electrical sub contractor who thinks they did everything right. Let me tell you something. That retention that you say you recieved could only have been paid out of Perini's escrow account. MGM did not pay full retention to single subcontractor on CC. Please quit talking you sound like a buffoon.
Cry, whine and snivel those who haven't been paid for their subcontractor work. Perini or MGM will pay all those who followed the contract verbatim to the terms and conditions each company made when contracts were signed.
For example: how many put in their subcontracts that Perini is to pay for all changes regardless of payment received from Owner or not? If Perini directed the work, Perini pays net the 10th of the month following the date of the invoice with no retentions being withheld? How many put in their subcontracts that if Perini ordered the work and PCO was signed Perini had to pay? How may put in their contract that any schedule adopted or incorporated into their contract had to be first mutually agreed upon and all acceptation costs and overtime costs were paid by Perini regardless of payment from owner? How many put in their contract that retentions shall be paid when work is 50% complete and no future retentions will be withheld? How many put up performance. How many put up payment/performance bonds for their work to get retentions released early or no rententions at all?
Sound to me like your all quick to work and not too bright in the contract side of business. Sure anybody can get work these days; the hard part is making money. We have an old saying, pigs get fat -- hogs get slaughtered. How many were too cheap to hire the personal to manage the contract document control to ensure payments are made and how many signed contracts without changing the most important aspect, how are we getting paid and what is required of us to be paid timely!
I say it again, for those who aren't paid and didn't follow the contract; God Bless MGM and Perini, justice well served for not following the contract notice and change order requirements and no payments should be made. It's about time the schmucks get out of our industry and get back in your holes where you belong and stay out of this industry, you deserve to get nothing!
lol, navedd, hum, sounds to me like you have inner knowledge of all contracts executed with all subs. If this be the case then you'd know better.
Its2hot...I know more about the City Center and contracts than you. What project did you work on? Let me tell you those clauses you listed are nothing special. Do you really think your the smartest contractor on all of City Center? You may have gotten lucky that Perini cut an escrow check. That might be because the owner of your company is good friends with one of the VPs at Perini ie Pat, Craig or Shelton. It had nothing to do with your contract's terms. MGM has disregarded every clause of the contract when it comes to billing. Get off your high horse and wake up to reality. MGM is ruining the lives of thousands of people and you think people are getting what they deserve. Your messed up...seriously!!!
There's a clause in the contract.."No delay by Contractor" that basically says no contractor can delay for any reason other than non-payment. So we kept working because we got our payments even though there were multiple deducts every single time. It took us over 10 months to get legitimate employee salaries approved because the paperwork kept getting "lost". They also put in a "Reasonable Adjustments to Work Schedule" clause so they could keep on changing their minds over and over again and generate more PCO's that kept us going. Did you know that by NRS regulations the Owner has over 45 days to issue a change order once received? You know what that means? The work gets done and then the change order gets signed. Maybe. I love this "follow the contract", "follow the contract". That's not the way it works and we all know it. They push and push and push to get the job done and we do it. Why? Because we need to keep working on the day and in the future. That's the truth. Sure, we should all have the signed change orders in hand before the work is completed. God knows we girls in the office who actually collect the money would love that. But that NEVER happens. Not on this job and not on any others. This project was seriously f'd up from the beginning and it just got worse and worse as the months went on. But really, if we all waited for a change order to get signed to do the work most of the projects out there would take 5 years or more.
I just want to put in my two cents worth here. I don't know anything about contracting or sub-contracting but I feel like I'm actually learning something here by the discussion. It's great to read an actual exchange of ideas and opinions rather than the usual political crap that gets tossed in to every story.
That's it . . . nothing to add to the discussion . . . just thanks.
We worked on all projects, from day one to the last project built.
We have no relationship with Pat, Sheldon, Ron, Jack or anybody else, we've done billions with them over the years and do trust one another as far as we can throw one another, it's the contract that dictates the payment terms, it's still a business and we all know just that. We have a good lawyer excellent legal advice before work was started, except Block "A" which is when advice started and which point the contracts were changed and the prime contract between Perini and MGM, provisions of this contract were not incorporated by reference and subcontract changed payment terms and who was responsible for payments for all PCO work when work was ordered by prime or MGM, payments were due. . We did messed up on Block "A" and soon realized how payments weren't going to be made on other projects if the other contracts weren't changed, These changes occurred on all contracts thereafter and payments were made, no exceptions.
We held no bones about it, payment are made when payments are due and PCO's were started when documents provided an avenue of payment before work started, all signatures were completed and provided, then work started. If not, no work was started. We employed enough staff to manage the paperwork Perini was generating and we employed enough accounting personal to ensure payments were timely. We provided the NRS notices when payments were late and PCO's stacked up on Block "A". To put simply, we followed the contract and were paid except $1.5 million on Block "A".
MGM didn't hold a gun to anybody's head nor did Perini hold a gun to their head. Each subcontractor who worked on the project screamed, pick me-pick me- pick me- pick me -- we will do your job for this much money and we will do your job pursuant to the contract documents we've agreed to when the contract was signed. So who's the dummy here, sounds to me, MGM and Perini did their job and did it very well, what about the subcontractor? They have a legal and moral responsibility in the entire mess they helped create. Remember -- pick me -- pick me --pick me they said when they bid and signed a contract, they agreed to perform the work and comply with the contract. So did they make a bad deal or just become too stupid and not follow the contract notice requirements, guess time will tell. Those who get paid, good deal and great document control, those who don't get paid, to sad to bad, next time follow the contract documents and complete your paperwork.
Call me cruel or insensitive, oh well. Welcome to the real world of construction. It's not personal, it's a business and we're here to make money, we just elected to make money in an industry where times have changed and its run like a corporation not mom and pops let makes a deal anymore. If they can't stand the heat, get out of the kitchen and let us play in our playground!
Fully agree with its2hot on nearly everything. The mid size subs that relied on Perini to get them paid without approved contract documents will suffer to the end. They will be offered dimes on a dollar. The bigger subs, like HVAC, Plumbing, Electrical etc had the power to stop the job in its tracks. Bet that they get every dime. But the subtier contractors, like concrete coring, small material suppliers etc are at the mercy of Perini and the major subcontractors. They get screwed every time.
Then the only thing left will be the bickering over "delays, unknown impacts, and my favorite "force majeure". "Gee, it rained today, so we had to go home". Good luck with that here. WTG, its2hot.
"But really, if we all waited for a change order to get signed to do the work most of the projects out there would take 5 years or more." And your point with this statement means what?
If I am to understand, your employer is going to build a project out of their money; will not stop working because it might take longer to the owner to occupy the structure? What a concept, hope the checking account/savings account are well stocked, won't last long with this kind of mindset.
I haven't heard that concept for years and in this industry since 1994 when lawyers, architects and engineers placed the responsibility on the contractor to provide documents control and provide notices where notices are due. Especially in Nevada, Nevada law is designed to protect the contractor who provides the work, the laws in Nevada provides the contractor rights and remedies where no other states provide such a contractor friendly payment laws and stop work notices when payments are late, regardless of what the payment is for. Remember the Venetian, laws were enacted to stop what is occurring on this project, providing the subcontractors followed the NRS , failure to do so, too bad, so sad, hope your employer has learned a valuable lesson and doesn't do that again.
Remember, private work is inherently different than government work, you can't stop work on government work, your legal rights afforded to any contractor on private work is so generous that what is occurring to many is a choice and seems not to be working out well for many for not following the contract or modifying the contract to suit each individual companies needs.
Okay so now we'll hear, but we wouldn't have got the job, we wanted the work, we saw an opportunity to make money; we jumped at the chance; we had to take the work to keep personal employed; economy was slowing. It's City Center the largest project in Nevada's history; we had new bragging rights; our resume would be much more impressive. Hum how'd it work for you? Hum, was it worth it? LOL, remember an old saying, we can go broke at home sitting around doing absolutely nothing; we're not going to do it working and we're surely not going to go broke just because we want to be friends.
I don't understand the whining and complaining about MGM or Perini, they'd did exactly what was agreed upon and what subcontractors enabled them to get away with. Hopefully you all learn from this and the next time you jump in with both feet, first and foremost, remember the contract and how are you getting paid and when is payment due. It's not rocket science or being hard to work with, it's your future and the future generations that the business may choose to support, continue has you've have it works for you, if not, hope you learned a valuable lesson and don't make mistakes again. It isn't personal; it's only a game and every game has a set of rules, play by the rulebook and know the rulebook, you'll win the game every time!
What happened to happy thumbs Gibbons? I thought he was going to be the man? and settle this? Looks like it was a waste of taxpayer money...go to court.
The Harmon may be an insurance claim, but MGM Mirage made it a very central issue in their lawsuit.
How it works out remains to be seen, but it is definitely a core matter.
I'm with TonyV on this. I don't know anything about construction but the discussion here has been very interesting. So thank you both sides for an interesting education in the construction industry. One thing I can not really figure out from the debate is, did the guys working on the job get paid? I mean like the plumbers, etc.. get their paychecks from their employers? The worker works for the subcontractor not Perini, MGM, or anyone else. They sold their labor to their employer and should be paid what their employer owes, right? Help me out here guys to understand this.
Hermit,
All workers were paid by subcontractors.
Its2hot,
You really have no idea what you are talking about. The majority of the subcontractors on City Center have done everything per the contract. MGM is still holding their retention. You are NOT the one great subcontractor in this 8 billion dollar mess.
MGM has not done what they agreed upon. They have not paid on their final contract values. Forget change orders, pay retention.
Harmon is not central to any arguement. MGM is using it as a scapegoat. There are 19 individual projects on City Center. Each one has their on GMP. One project cannot, by law, affect another project.
Navedd:
"You really have no idea what you are talking about. The majority of the subcontractors on City Center have done everything per the contract. MGM is still holding their retention. You are NOT the one great subcontractor in this 8 billion dollar mess."
I love it when others assume contracts were followed by a majority of the subcontractors, its Vegas and most subcontractors in Clark County work on word of mouth and only a select few have the knowledge and staffing to properly administer the General Conditions of the contract, most owners are too cheap and want to keep all the money they can for their personal pocketbooks. Only a select few us really follow the contract change order notice requirements let alone have the balls to stop work when payments aren't made timely. Based on how you perceive this thread, I'll assume you fall into one of the three categories; disgruntled ex Perini employee who was let go when project was completed; subcontractor who wasn't paid and believes the contract was followed; Employee still employed by Tutor-Perini, doubtful though most have been let go, a couple went to T3, and a few moved to other regions within Tutor-Perini.
Sounds to me you're trying to say that MGM is 100% at fault and a majority of the subcontractors have PCO's signed, sealed and delivered by contract change order to their contract and MGM is refusing to pay. This is absurd to think such a thing based on what I know of the trades in the valley. Subcontracts were so intertwined into to the mindset, we have to get the job done, hurry, hurry, hurry, MGM wants to open and Perini is pushing us like there is no tomorrow. Like I said, MGM and Perini did exactly what any prime or owner likes, a subcontractor who spends the money first without first knowing how payments are going to be made and we'll argue about after the fact, brilliant move on bath parties from what I see.
The point being is that many are not paid from what I see in the articles, I don't know this to be true. I only read what the Sun publishes and what the media outlets have reports. If the subcontractors are in fact not paid and they have satisfied the contractual obligations and fully provided all legal notices and attained all directives in writing with a clear and concise path to receive payments for the changed work, then by all means, they've secured the right to payment and payments will be made.
I suspect though that many didn't follow the contract notice requirements as the case for most of the subcontractors in the Clark County area and that they relied on PCO's without having done their due diligence before executing the work and spending a whole bunch of money.
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I respect both positions MGM and Perini have, they'll settle their differences and all subcontractors who in fact did comply with the contract will be paid, it might take awhile but they should've realized that when they signed the contract. City Center is no different than any other private works project. I have yet to be involved with any private project where the final payment isn't in dispute over changes and other allegations, its industry standard from around 2005 forward. These subs will be paid and will more than likely be awarded interest an legal fees, it's up to them to secure their position and start doing whatever it takes to get paid. If this means foreclosure, go for it, they can sell their debts to firms that know how to play this game, it's only a game that's all, nothing personal or to be taken negative. It the rulebook to the game and they need to learn how to play the game.
I also believe that any subcontractor who didn't comply with the contract and failed to have the required written documentation in their possession prior to spending any money on changed work shouldn't get a dime for this work. It are these schmucks who've ruined many projects by being low bid and sucking off us that do bid the contract costs to properly manage the contract and change order requirements. Now we'll have a few less schmucks in our industry and we can go back to the play ground and build work without having to complete with lowball prices that our industry has suffered as a result of low bidders taking work away from us that know how to properly execute and manage what is required by contract. To play the poor little me syndrome and beg for something when they have no right to entitlement is absurd and they need to just pack their toys up and go away.
We'll see as this sage unfolds in the Media and we'll see how many schmucks really existed on the project. I hope not too many, I suspect differently though and many will pack their bags and go off to their corner and hopefully learn from all this and never to let the tail wag the dog in this industry.
Hermit:
Employee paychecks were paid to all of our staff and I suspect more than likely all personal were paid their hourly wages and benefit packages where applicable. Then again, who really knows though, this is something that any party to a claim wouldn't disclose if this were the case; it would be terrible media for all involved.
There are though rumor mills flying around this industry of certain personal who allege they worked in management or classified as such on the construction side of the project that might be seeking a class action suit to collect bonuses they feel they're entitled too for the hours of work they allege to work meet the schedule opening date. I suspect this to be only a rumor, but who knows, with our economy unraveling and getting a whole lot worse in this industry, people tend to act differently when their income isn't what it used to be and they feel entitlements are due for reasons they feel are just.
This has been interesting, quite a few people in this industry can't wait to see how many owners pack their bags and leave this industry and how many survive and get paid and learn a valuable lesson in strict contract compliance, contract management, document control, and project level personal staffing needs. This case, if it does go to court will send a clear message throughout all of the construction industry and owners of projects. It will be interesting to see case law from this and how contract laws and extra work laws are modified as a result of this case. We all thought the Venetian was bad; this one tops all projects with respects to the amount of the claims and allegations being made.
Good Day!
I wish you'd all shut up and get off your high-horse attitude. I was on site for three years and part of one of the design teams. I for one witnessed the sloppy unprofessional work both Perini and their sub's performed on site. I spent the majority of my time documenting field deficiencies that both Perini and their sub's ignored. i wondered at times if they could actually read or understand a set of documents at all.
Yes, it was a busy site and a lot was happening in a small area at the same time but you have to wonder how most of the workers' were ever qualified to do the work they were hired to perform. And yes, the good-old-boy Vegas attitude was in play here also. I don't know how many times I was told that's not how we do it here in Vegas.
And as far as the Union's go, I used to be a UAW member back in the 1980's until I got smart and went to college and figured out that all they do is take your money and price you out of work. The good oh brotherhood was a joke on this project. As again, I witnessed your so-called professional work and attitudes to the extent that it was laughable. Why does it always have to be the us against them attitude? If you'd think about it, we're all in this together and regardless of your feelings about the owner, weren't you hired to do a job? And a best to your ability job at that?
I have no respect for MGM nor Perini either, their both a bunch of little minds with very large paychecks that do nothing but to feed their egos. Talk about to many chiefs and not enough indians! I have no simpathy for either. Again, the only winners here are the worthless attorneys' whom always seem to win out over everyone. I think my next career will be in the law field bilking millions from both the Owners' and Contractors'.
Whitman:
We love designers; they're the only source of income that is truly dependable on contracts for the past 15 years. Keep up the good work and we'd love more designers working at project level helping this magnificent industry stay afloat for us during these tough economic times. Designers, as you are aware, for 15 years now, have contributed to help boost our economy at project level and have provided us valuable learning tools on how not to design projects, keep up the good work.
Please don't stop with whatever you have been doing, it works for us and be sure to tell fellow designers of any sort that we appreciate them too, but not for designers we would have not been afforded the opportunity to hire so many project managers, accounting staff, project engineers and lawyers to manage the process with writing RFI's and executing change orders, again, we like to thank all designers for the wonderful contribution made to our industry.
Attorneys wouldn't be needed if the specifications weren't cookie cut from project to project and if plan sheets were actually designed by a competent designer these days before being put out to bid and contracts signed. On this project alone we executed millions upon millions in contract change orders that were otherwise avoidable had the plans been drawn up right in the first place. This problem is you're a small fish with the overall scheme of the project, if you're qualified; you are few and far between. Unfortunately designers of the past 15 years are mindless trolls and have clue what they're looking at or how projects are built in the field. Math isn't done by people, they rely on ACAD and lines drawn on the screen, just because ACAD say's it so and some engineer / designer draws it, more often than not, it's incorrect.
Before throwing stones at project level staff, take a good look at architects, engineers, designers, and specifications, they wrote the rule book to the game, we just follow the rule book they wrote. It's not personal, it is expected of us today and we're obligated and more than happy comply with all aspects of what was contracted to provide. Base scope and hundreds if not thousands of RFI's and hundreds CCO's that accompanied the RFI responses...
Good Day!
Whitman, its2hot usually has no point but the design documents for most of the project did read "not for construction". The drawings on city center were absolutely horrible. I can't tell you how many cuts didn't even refer you to a drawing that didn't exist. Or how many cuts conflicted on dimensions. The designs on this project were of horrible quality. If I were you, I would be ashamed to say I contributed to that effort.
This mess is like a CDO squared. Some of the subs no doubt need to pay their own subs who are screaming for money.
CityCenter is owned by a limited liability company jointly controlled by MGM Mirage and Dubai World. Does the property have a mortgage on it?
If yes, is the property worth less than the amount of the mortgage, based upon a reasonable appraisal?
If yes, then the subcontractors are unsecured creditors.
Back in 2008, Lehman Brothers stiffed a whole bunch of subcontractors on its California real estate development projects, which were held in separate LLCs. Based on the over-mortgaging of each of those Lehman California projects, groups of 3 subcontractors on each of those 20 projects got together and filed involuntary bankruptcies against each Lehman real estate owning LLC.
Just a thought if you catch my drift.
There is no mortgage on City Center