Update 12-11-09: Could the AOC be on the hook for the contract snafu, too? California Business & Professions Code gives the Contractors State License Board registrar the authority to fine public "officers or employees" who "knowingly" award contracts to unlicensed businesses up to $15,000 for each citation. State law requires public officials to check a contractors' license status before issuing a contract. AOC officials have said that didn't happen.
The Judicial Council has sued Aleut Global Solutions LLC, the Colorado Springs company that maintains Northern California courthouses, for performing work without a contractor’s license.
The suit (.pdf), filed in San Francisco Superior Court on Monday, says AGS breached its three-year-old contract with the judicial branch. The complaint seeks disgorgement of “all compensation paid to them by the Judicial Council,” a sum totaling more than $14.5 million over the life of the contract, an Administrative Office of the Courts spokesman said Thursday.
Carole Hurst, a public relations coordinator for AGS, said the company was aware of the lawsuit but she declined to immediately comment on the allegations Thursday.
After the jump: Downside of being an LLC, who messed up, and why is AGS still doing the work?
The strange tale of the missing AGS license surfaced last week when AOC employee Michael Paul went public with claims that judiciary officials never acted on his complaints that AGS and another private building contractor, Jacobs Facilities Inc, were working on court facilities without proper licenses. The attorney general’s office is investigating the matter. Paul is now pursuing a claim under the False Claims Act.
AOC officials say they took AGS executives at their word that they possessed the right papers. But no one in the AOC ever checked. AGS does not have a contractor’s license and, by law, the state doesn’t issue such licenses to limited liability companies like AGS, said Contractors State Licensing Board spokesman Rick Lopes.
So why didn’t anyone ever check on AGS? And who should have? AOC Chief Deputy Director Ronald Overholt said he doesn’t know.
“We’re anxious to find this out,” Overholt said. “That’s what the attorney general is tracking down.”
The AGS contract snafu raises a lot of questions about the branch’s ability to oversee the hundreds of courthouses and other buildings that have recently transferred from county control to the Judicial Council. So far, the AOC hasn’t provided a lot of answers, other than noting that litigation is now pending.
Perhaps surprisingly, AGS continues to manage its fleet of courthouses, even though the AOC is not paying any invoices pending the outcome of the attorney general’s investigation.
“The dispute is not about the quality of their work,” Overholt said.
The AOC has a contingency plan in place for building maintenance should the attorney general advise the branch to stop working with AGS, Overholt said.
— Cheryl Miller
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