MPMA Sues RKR for Malpractice, Claims Over $400,000 in Damages
At a special meeting on March 31, the Mount Pocono Municipal Authority board unanimously authorized legal action against the former Authority engineer, RKR Hess, to recover alleged excess costs of the spray-irrigation project on which the firm acted as both the project and supervising engineer on behalf of the Authority. RKR was the Authority’s engineer since the 1970s. In 2013 RKR was also retained as the project engineer for the Authority’s spray-irrigation project. In June, 2018, on the motion of then-president Matt Hensel, the Authority unanimously voted to remove RKR as the Authority’s engineer. At the time, the project was about six months behind schedule. After the change, the project was on schedule by the end of the year. According to the Authority’s Executive Director, Jonathan Klotz, issues with RKR’s performance as project engineer continued to arise after June 2018. By letter dated April 30, 2019, the Authority served on RKR a “Notice of Termination for Cause”, citing “an accumulation of problems”. The termination letter, sent by the solicitors for the Authority, identified ten instances of “substantial failure” by RKR “arising out of a breach of the standard of care” in its performance as project engineer, or breach of the agreement. The letter listed approximately $400,000 in excess cost incurred by the Authority as the result of RKR’s alleged poor performance, but said that there were numerous items for which the total damages had not yet been determined, and that the investigation was ongoing so that additional problems may also be discovered. Among the issues cited were “Engineering Design Deficiencies”. The Authority claimed that “RKR approved ill-designed systems and equipment” for the project, such as drawings done in a “sub-par manner.” These asserted deficiencies allegedly resulted in the Authority incurring about $150,000 in “change of scope items” and other costs. The termination letter also referred to charges which the Authority says it was not supposed to be billed for under the contract, delay costs allegedly caused by RKR’s failure to timely approve shop drawings, and costs to rebid contracts which received no bids assertedly due to RKR’s errors in the original bid documents. One of the major alleged problems was the failure to include a grit removal system in the original design. The “influent”– the raw flow received at the plant for processing – naturally includes “grit” in the form of rocks and gravel from the roads. The RKR plan allegedly called for the grit to just sit at the bottom of the tanks and periodically shoveled out manually. That would shut down entire operation for a couple of day. In between shutdowns, the grit could take up as much as one-third of the capacity of the tank significantly impacting the efficiency and capacity of the operations. The lack of a grit removal system allegedly required a re-design resulting in further delays and expenses. The Authority says the total cost to rectify the problem is still not known, but is expected to be several hundred thousand dollars. RKR responded to the termination letter in June, 2019. The company denied that there were “substantial failures” or that the engineers breached the “standard of care”. RKR asserted that some of the problems resulted from unknown conditions, others from changes or improvements requested by the Authority, and some the fault of other contractors, but none were the responsibility of RKR. In November, 2019, the Authority authorized its solicitors to retain an independent engineering firm to evaluate the work done by RKR. According to Klotz, that review concluded that RKR had failed to perform consistent with acceptable professional standards, causing substantial unnecessary expenses for the Authority. After consultation with the legal team representing the Authority, Klotz said that the decision to take action was made “in the interests of the customers of the Authority to seek recourse against a consultant not doing right by the organization and our people.” Klotz indicated that the Authority believes that the total damages would be substantially more than the $400,000 detailed in the termination notice, as the investigation, which is continuing, has revealed additional alleged damages and new types of problems allegedly caused by RKR. A source familiar with the Authority’s project, and the claims against RKR, estimated that the total alleged damages would be in the “high six figures, close to seven.” Klotz said that the legal case was filed on April 1, but that a formal complaint had not yet been prepared. RKR declined to comment for this report, noting that they had not seen a complaint. The total cost of the spray irrigation project will be just under $20 million and is the main factor in the recent increase in sewer fees in the borough. RKR was paid approximately $1.5 million in connection with the project. That figure does not include the amount paid RKR as engineers for the Authority. In the months prior to its termination, those fees ranged from $15 to $25 thousand a month. RKR. Hess Associates, Inc., was purchased by Universal Technical Resource Services, Inc. in September 2012 and operates as “RKR Hess, a division of UTRS, Inc.” The current members of the Authority board are Ron Emilie, Matt Hensel, Aida Montanez, Michael Oser, and the borough mayor.