Courthouse Bonding Decision Will Not Cost Kentucky

A new requirement that construction managers on 35 state courthouse projects insure the entire value of their work will not increase the state’s costs, an attorney investigating the projects said.

But attorney William Geisen of Fort Mitchell said the requirement may decrease the profit margins of the companies managing construction, the Lexington Herald-Leader reported.

Some construction managers contend county governments should pay the costs of 100 percent performance bonds, which could total as much as $3.6 million in additional costs, he said.

Kentucky Supreme Court Chief Justice John D. Minton appointed Geisen to investigate the state’s courthouse construction program after the Lexington Herald-Leader reported that Codell Construction of Winchester was routinely bonding only the amount of its fee on courthouse projects rather than 100 percent of the contract value.

Codell is construction manager on 24 of the 35 new courthouse projects. Construction managers on the other 11 projects are Alliance Construction of Glasgow or Branscum Construction of Russellville.

The newspaper could not reach John W. Hayes, a Lexington attorney who represents Codell, for comment.

Geisen’s comments came at a meeting of the Court Facilities Standards Committee, a 10-member panel under the auspices of the Administrative Office of the Courts, which reviews new court facilities statewide.

It was the group’s first meeting since Minton said on March 24 that he would ask county judge-executives to require construction managers on their courthouse projects to furnish immediately a performance and payment bond equivalent to 100 percent of the contract sum.

Geisen concluded that state law, state court regulations and contracts between construction managers and counties for new courthouses require 100 percent payment and performance bonds as soon as contracts are signed.
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Information from: Lexington Herald-Leader

Topics Construction Kentucky