Contractor accuses Agua SUD of breach of contract

Six weeks ago, a contractor working on a project to bring sewer services to residents of Palmview issued a notice of breach of contract to the Agua Special Utility District, the entity overseeing the project.

The contractor, O.G. Construction, made the revelation after Agua SUD brought in an outside company — Southern Trenchless — to review work done on the project. The resulting presentation during a board meeting last week found several issues with manholes located in sections of the sewer project that were being worked on by O.G. Construction.

Mario Salazar, the vice president of Southern Trenchless, said the manholes discussed during their presentation were selected at random.

After the presentation, the board of directors agreed to hire Southern Trenchless to conduct an inspection of the sewer system — which entails inserting a video camera into the sewer line — at a cost of $239,691.

Now O.G. Construction is pointing out that the work Southern Trenchless inspected was not completed work.

They stated that they have not given Agua SUD a notice of readiness for that work “because the work in fact is not ready for inspection, or otherwise complete. Therefore, Agua SUD has again failed to adhere to the terms of the contract,” according to letter from Orlando Garcia, an attorney for O.G. Construction, of which his brother — Omar Garcia — is the president.

“Agua SUD solicited Southern Trenchless to inspect areas of the Project that were being worked on that same day,” Garcia wrote. “Both common sense and the terms of the contract call for a different procedure. However, neither were followed here.”

Garcia further accuses Agua SUD of using the presentation as retaliation against the company for issuing a notice a breach of contract to Agua SUD.

“We believe that the presentation and resulting media involvement was actually an effort to retaliate against O.G. for pending claims for breach of contract that O.G. has against Agua SUD,” Garcia wrote,

Details of those pending claims were not available. Read the letter from O.G. Construction here. 

Additionally, Garcia stated he believed the alleged retaliation also stemmed from Agua SUD board members expressing that they felt forced into hiring O.G. Construction for the sewer project.

The board begrudgingly hired O.G. Construction in May 2017 after their first choice was rejected by the Texas Water Development Board.

However, Agua SUD General Manager J.E. “Eddie” Saenz denied any sort of retaliation against O.G.

He acknowledged that the O.G. had made claims of a breach of contract against Agua SUD but said the inspection was for the purpose of ensuring there are no deficiencies, in the work.

“This has got nothing to do with anything else except Agua trying to reach a comfort level of accepting over 30 miles of line and that they are completed properly,” Saenz said. “If we did find something and it was after the fact — if it was after a year, after the warranty is up — then Agua has to start paying for all those repairs themselves.”

Saenz said Southern Trenchless had inspected other areas of the sewer project for the presentation that they didn’t get to discuss during last week’s board meeting.

“All we were doing was performing a demonstration in that area because that’s the area that we could get to,” Saenz said, referring to the process of a televised inspection. “We weren’t here trying to find anything, we were here just trying to get a demo of it.”

Saenz reiterated that Agua wanted to move forward with a full inspection so that they would feel comfortable with the work they were accepting.

“If we clear it up now and we notice some deficiencies, and we’re not saying there are, at least we did our due diligence to make sure we’re accepting something that was done properly in accordance with the project,” Saenz said.