State fires top school contractor Firm paid millions to run projects ousted from N.J. building program Friday, February 22, 2008 • BY DUNSTAN McNICHOL • Star-Ledger Staff A top contracting firm that has collected more than $50 million from New Jersey's troubled school construction program was fired yesterday for its role in overseeing a Neptune school project that was infested by mold before the building was finished. The termination of Gilbane Building Co., one of 12 firms that together have been paid more than $350 million as "project managers" in the school construction program, marks a new level of accountability in a program that auditors had chided for waste and lax oversight. Besides firing Gilbane, the Schools Development Authority won agreements from the school's builder, Turner Construction Co., and its designer, SSP Architectural Group, to pay the Authority a total of $6.5 million to settle claims arising from the Neptune project. The Community Midtown Elementary School, originally scheduled to open last September, was knocked a year off schedule after mold was found in the walls of the partially built structure. Eventually, Turner agreed to tear down a portion of the school, clean out the mold, and rebuild it. Scott Weiner, chief executive officer of the Schools Development Authority, said the repair work cost the state about $13 million. He said the Authority plans to sue Gilbane to recover the balance of the repair costs. "Mistakes happen, but the taxpayers of New Jersey should not have to bear the financial responsibility for these mistakes," Weiner said. An attempt to reach Gilbane for comment yesterday was not successful. Gilbane was one of 12 firms hired as project managers to oversee the state's ambitious $6 billion effort to repair or replace hundreds of outmoded, decrepit schools in Newark, Camden and other needy communities. Under a series of contracts that have paid Gilbane about $53 million, the firm was responsible for overseeing school projects in 14 communities. Yesterday, the authority acted to remove Gilbane from all those jobs, saying the firm and the authority had "fundamental differences" in their understanding of Gilbane's oversight responsibilities. The Community Midtown School is back on track and scheduled to open in September, Weiner said. The project was halted about a year ago after officials discovered that gypsum had become contaminated with mold during delays in construction. Because mold-infested gypsum had already been used in the partially constructed building, the Authority had to rip off the facade and replace the contaminated material. Weiner said the 14 school projects Gilbane was overseeing will be divided up among authority staff and new construction managers being hired for the program. The authority is gradually moving to reduce the roles of project management firms after a series of audits found they were charging far more than typical construction managers and had no clear job assignments. The action against Gilbane comes as Gov. Jon Corzine is preparing to introduce legislation that would authorize another $2.5 billion in spending on the school building program. Lawmakers have balked at the additional funding, saying the school program has never been held accountable for its earlier management problems. Dunstan McNichol may be reached at dmcnichol@starledger.com or (609) 989-0341. © 2008 The Star-Ledger. Used by NJ.com with permission.