Recent Review: Major Breach of Contract Summary of Factors To recap, Hargens Inc. had a contract with the 2205 Sacramento Street HOA to repair and restore the Owner’s master bathroom to its original condition as required by law. The Owner’s contract with Hargens was for substantial upgrades and improvements. Because Hargens had a contract with the HOA, which called for demolition, demolition—except for removal of the bathtub—was complete by the time Hargens wrote the contract and sole-source bid for the Owner’s contract. There were, with the exception of the subfloor under the bathtub, no hidden areas, no surprises in store. Hargens had the luxury remodelers seldom have, they could assess everything they saw and include it in the bid. This was true not only for the Owners contract, but also for the HOA contract. In fact, Hargens went through four sequential bids before their final HOA bid price was developed and accepted. Primary Factors 1 Contract Documents – Working Drawings: The Contract Documents include the Project Architect’s Working Drawings and a Schedule of Performance. Much of the substandard work produced by Hargens employees was at least in part due to their failure to follow the working drawings. In addition to the defects documented in photographs in the Jobsite Conditions documentation the bathtub installation was not located as specified in the working drawings requiring extensive adjustments to the tile design. Also, the new section of subfloor around the toilet required by the replacement of the closet/Herkel bend was left without adequate structural support. 2. Contract Documents – Schedule of Performance: When Hargens Inc. was dismissed by the Project Architect in late November the work on the Owners contract had been going on for nearly six  months and was only 6.7% complete. This meant that the Owner had been without the use of the only bathtub/shower in her unit for that entire time, an abusive hardship for an elderly woman. When the Schedule of Performance was in jeopardy Hargens failed to notify the Project Architect to negotiate a revised schedule, leaving Hargens in breach of contract after the August 1, 2010. Additional Factors: 1. Additional Work by Others: When Hargens personnel anticipated a problem their preferred solution was to call in a potential subcontractor and solicit a sole-source bid. This was the case for potentially dealing with lead-based paint within the unit, even though, as a result of pressure by the Owner, it was later determined that there was no lead-based paint in any areas of Hargens’ work. It was also the case for potentially dealing with hallway ceiling popcorn in the work to move the bathroom doorway approximately six inches, even though the Owner was able to have the doorway moved and a new door installed without involving the ceiling popcorn in any way. Both bids were in the range of $1,200 to $1,800 and would have been significant increases to the cost of the job. 2. Finish Work: The Project Architect, in doing diligence prior to agreeing to employ Hargens to both execute the repair and upgrade work desired by the HOA and the Owner to improve the appearance and function of the master bath was shown a project or projects Hargens had completed of a similar nature. But Hargens was unable to satisfactorily execute the most basic work of the upgrade including new electrical, plumbing and framing work. Hargens was also unable to produce a cabinetmaker that had any idea how to approach an intricate and complicated design. 3. Change Orders: Hargens neglected to include electrical circuit upgrades required by code in its sole-source contract, and then attempted to charge the Owner for it as an owner-required change in the scope of work in the contract. When this didn’t work Hargens attempted to get the HOA to pay for the work as an HOA Change Order. The failure of this strategy produced resentment on the part of the Hargens’ Job Captain, who called the Owner and vented his acrimonious feelings at some length. Hargens also apparently neglected to include in their sole-source contract provision for fire-stopping around the three recessed lights called for in the design, and in the same fashion as with the electrical circuit upgrades attempted to charge the Owner for an owner-required change in the scope of work in the contract. 4. Contamination: Hargens had actually removed the sheetrock and carried out most of the demolition—except for removing the bathtub—before the Owner contract was signed, and the carpentry was not complete so that new sheetrock could be installed by the time Hargens was dismissed. That period was over six months of exposure to dust and other particulates—a known health hazard particularly to the elderly. Since the original cause of the project was the slow leak of sewage from the compromised closet/Herkel bend from the toilet above, it is likely that debris dust also contained pathogens. [The hazmat firm removed a portion of the ceiling, decontaminated that area and replaced the failed closet/Herkel bend. However the leaked sewage involved the window, portions of the wall, the floor and the subfloor.] 5. Quality Control: Ensuring the quality of the product is the lifeblood of any business, without it the business will sooner or later fail. At least some, if not all, of this project’s problems could have been avoided if adequate quality-control measures had been built into the process. That the job captain did not exercise quality control, and the contractor-of-record never appeared on site at any time throughout the process, left the job to the diverse capabilities of the individuals assigned to the project. The expectation on the part of the Owner of a good faith effort by the Contractor to carry out the contract and produce the project as designed was sorely disappointed.