Wednesday, October 19, 2011


The Los Angeles Community College District is moving to fire an Irvine contractor accused of shoddy workmanship and fraud as well as a Pasadena construction management company accused of poor judgment.

By Michael Finnegan and Gale Holland, Los Angeles Times |

October 19, 2011 - The Los Angeles Community College District is moving to fire an Irvine contractor accused of shoddy workmanship and fraud in the construction of a Valley College classroom complex that became a symbol of problems with the district's $5.7-billion campus rebuilding program.
In a letter released Tuesday, the district launched proceedings to bar the contractor, FTR International, from campus work for up to five years. The district cited "substandard work" by FTR on its $48-million contract to build the Allied Health and Science complex at Valley College. The district also said FTR filed a "false and fraudulent" report on the project with the state architect, which oversees school safety.

The troubled history of the Allied Health project was detailed as part of a Los Angeles Times series early this year. When the complex opened in August 2008, students and faculty found numerous construction problems, including missing exit signs and fire extinguishers and hanging light fixtures that were not securely attached to ceilings.

More than three years later, the district is preparing to make extensive repairs.

In another letter released Tuesday, the district also took action to fire a construction management company owned by Art Gastelum, a politically influential contractor.

The district accused Gastelum's company, Pasadena-based Gateway Science and Engineering, of mismanagement, poor judgment and falsifications in its dealings with FTR at Mission College. Gateway supervises $450 million in construction projects at the Sylmar campus.

The district's actions against the two companies mark a dramatic break from the approach that its elected Board of Trustees took for years as delays and cost overruns plagued the massive rebuilding program. The trustees rarely intervened as problems accumulated.

"The actions we are announcing today are the latest and most significant we have taken yet in our drive to reform our building program, root out mismanagement and waste, and ensure that taxpayers are getting full value for the dollars they are investing in our nine newly modernized and improved college campuses," Chancellor Daniel LaVista said in a written statement.

LaVista said the decision to move to terminate the contracts also was substantiated by an investigation by the district's inspector general, Christine Marez.

FTR and Gateway will have a chance to respond officially to the district's findings at hearings in December.

A spokesman for Nizar Katbi, FTR's owner and chief executive, had no immediate comment. The college district has awarded FTR $232 million in construction contracts.

In a phone interview Tuesday, Gastelum said Gateway would dispute every finding. He accused the district of violating its own procedures in seeking to terminate the contract. "I don't know what kind of kangaroo court the district is trying to put on me, but I'm not going to stand for it," he said Tuesday.

Both companies' owners have been major campaign donors to the district's elected trustees and its construction bond measures.

In its letter, the district alleged that FTR had claimed in June 2009 that the Allied building was finished, even though hundreds of construction items had yet to be corrected and completed. FTR had also installed a defective skin on the structure that allowed water to seep into the interior, damaging facilities and displacing staff, the letter said.

The district also alleged that FTR submitted a "false and fraudulent" payment application in connection with a 90,000-square-foot fitness center it built at Mission College.

The company, in its August 2008 application for $960,000, claimed that it had moved a water pipeline crossing the Sylmar campus, but the work had not even begun, the district contended. The job was not completed until early 2011, at a cost of $1.4 million.

Gateway oversaw FTR's work at Mission College as part of its construction management contract. The district said Gateway falsely certified FTR's claim on the waterline relocation.

The district also cited "poor judgment" by Gateway in awarding the no-bid relocation contract to FTR, which was not qualified to do the job.

Gastelum, Gateway's owner, said the payment application had been mislabeled.

The district's building program began in 2001 when voters approved a bond measure to modernize its nine aging campuses after years of neglect. Voters expanded the program with more bond measures in 2003 and 2008.

One of the first major projects to open was the health and science center at Valley College. Professors at the college were appalled; ceiling panels and floor tiles were askew, spigots were misaligned with sinks, cabinet doors would not close and there were hundreds of other construction defects. Wild temperature swings left students roasting or shivering.

On Tuesday, a Valley College faculty leader who teaches in the complex said instructors felt vindicated by the district's action. "We tried really hard for a long time to get the district to listen, and we were constantly rebuffed," said Don Gauthier, an associate geography professor. "It's been a real hard lesson."

In its six-part series, The Times reported that tens of millions of construction dollars had been squandered because of poor planning, shoddy workmanship and frivolous spending.

Largely in response to the articles, the district has established its office of inspector general, launched a whistle-blower program, created an independent review panel and tried to strengthen a citizens oversight committee.

With the recent election of two new trustees, the board is pushing to improve management of the program.

"Nothing is more important to our building program than its integrity," said Miguel Santiago, president of the district's Board of Trustees.

Last month, the trustees asked City Controller Wendy Greuel to review the district's hiring of Marez, the inspector general, and her company, Policy Masters Inc. The request followed an audit by the state controller that found irregularities in her hiring. The Los Angeles County district attorney's office is also conducting an inquiry into Marez's selection and an investigation into an alleged conflict of interest at Mission College.

Marez worked for Gateway from 1998 to 2003.

On Tuesday, six people from Marez's office and the district's construction headquarters arrived unannounced at the Gateway trailers at Mission College to seize documents related to its projects.

Gastelum strongly criticized Marez's role in the recommendation to terminate his contract, saying she was "running around wild trying to protect her job."

Marez defended her work, saying she was following proper procedures.

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