The Real Deal Miami

Skanska sues Frost Science Museum, alleging millions in unpaid work

Contractor was hired to finish the $77M job after the museum fired Suffolk Construction in 2014
By Ina Cordle | April 03, 2018 06:15PM

The Frost Science Museum (Rendering courtesy of Patricia and Phillip Frost Museum of Science)

The Phillip and Patricia Frost Museum of Science’s general contractor just filed suit, alleging millions of dollars in unpaid work owed to the firm and its subcontractors.

The lawsuit, filed by Skanska USA Building last week in Miami-Dade Circuit Court, claims the museum is in breach of contract for failing to pay for past construction work and to pay for it to finish 7,000 punch list items to fully complete the job. The suit further alleges that because the museum stopped authorizing payments in November, Skanska has effectively been terminated.

It is not the first time the Frost Museum of Science has been sued by its contractors.

The $305 million museum opened last summer at 1101 Biscayne Boulevard after years of delays, cost overruns, litigation and a fundraising crisis that led to a bailout by the county and the sacking of the museum’s former board of trustees.

In 2014, the museum’s board fired then-general contractor Suffolk Construction and hired Skanska USA to finish the job. The original 2014 contract value of $100.9 million was reduced to $77 million in June 2016 due to change orders, an exhibit to the lawsuit shows.

According to the suit, when Skanska took over construction, the museum assumed responsibility for the management of the project that faced “significant challenges.” It was behind its original schedule, the cost had far exceeded the original budget, design documents were incomplete and poorly coordinated, construction materials were scattered throughout the project and standing water on the site had created a breeding ground for mosquitoes, the suit alleges. In addition, trade contractor staffing was insufficient, morale was low, and the museum was months behind in paying trade contractors, the suit alleges.

Skanska and the museum signed an agreement in June 2016 that it would be paid $368,421 each month until March 31, 2017. Then, from that date until the completion of the project, Skanska would be paid on a time and materials basis for work requested by the museum, according to the suit and an exhibit. Instead, the museum “has engaged in a pattern and practice of requesting work from Skanska but refusing to pay,” the suit states.

Frank Steslow, president and CEO of the Phillip and Patricia Frost Museum of Science responded to the suit, saying in a statement that Skanska “has refused to honor its warranty obligations unless the museum agrees to pay Skanska additional money over and above that to which Skanska is already entitled,” and that the museum advised Skanska that it would not pay it additional funds for work that the contract already requires it to perform. “Skanska has now chosen to initiate this litigation in effort to avoid performing its obligations under the contract,” he said.

According to the suit, as the museum’s opening date approached last summer, its management began reducing funding authorizations and reducing Skanska’s staff, which prevented the contractor from completing the project. And when the museum received its certificate of occupancy in November, the museum refused any further funding authorizations. It also barred Skanska from the job site from November until January, and then only allowed it limited access, which was insufficient to enable Skanska to finish the job, the suit alleges.

“[The museum] has blocked Skanska’s extraordinary efforts to bring the [museum] to final completion because [the museum] has not want to pay Skanska for the work that needs to be done,” according to the suit. The museum has also failed to release funds that are payable to Skanska’s subcontractors, the suit states.

“Skanska and its subcontractors – including many small and local businesses – are owed millions,” said Michael C. Brown, EVP and general manager for Skanska USA in Florida, in a statement, without specifying an exact dollar amount. “Finishing details and ‘punch list’ items identified by the Frost Museum have gone unaddressed for months because Skanska has not been authorized to manage the work by Museum leadership. The terms of the contract between Skanska USA and the Frost Museum are clear, and yet the Museum is refusing to let us finish our work.”

The museum has faced other construction-related lawsuits in the past. In 2016, Suffolk, Baker Concrete Construction and Kirlin Florida filed separate suits,  alleging in part that numerous defects in the overall plan held them back from getting their work done on time.

During its development, the museum faced other contentious issues. A fundraising shortfall in 2016 left doubt over whether the project could pay its $5 million to $7 million monthly bill to its contractor, and Miami-Dade ultimately approved a controversial $45 million bailout to bridge the financial gap. Phillip and Patricia Frost fired the museum’s board of trustees in the crisis’ wake, and Gillian Thomas, its former CEO, stepped down several months later.