TXDOT: Delay will not cost taxpayers
cent complete, with several columns in place at the site. TxDOT had paid Ballenger $9.9 million for the job before the default.
The $5.7 million Lakeway Drive project is about 35 percent done, with columns and the horizontal bridge deck pieces in place. Ballenger was paid $2 million.
Bob Kaufman, TxDOT’s chief communications officer, said the default will have no financial impact on the agency. TxDOT requires contractors to purchase performance bonds at the beginning of a project, and under those agreements, the insurer must find another company to finish the work. If that costs more than TxDOT still owes under the original contractor, the insurer is liable for the difference.
“Taxpayers will not incur anymore costs, other than the delay, on all three projects,” Kaufman said.
Ballenger, which was doing projects for the city of San Antonio before its financial troubles, did not have any contracts with the city of Austin, said Sara Hartley, spokeswoman for the city’s Public Works Department.
The exit by Ballenger, founded in 1937, is the second to affect significant highway projects in Austin since 2010. Wiser Construction, a Nevada company, went bankrupt in July 2010 and left several TxDOT jobs, including the construction of two overpasses at U.S. 290 and MoPac Boulevard (Loop 1). Work did not resume on that project for almost two months, and it was completed this week, about a year after original estimates.
Tom Johnson, executive director of the Associated General Contractors of Texas, said the construction slump of 2008 and 2009 had led Ballenger to seek work outside its traditional business area in the Valley. Johnson said that forced the company to use more remote material sources and new subcontractors, at greater cost, and the company appeared to have submitted overly aggressive bids as it tried to break into new markets in Corpus Christi, San Antonio and Austin.
“And then costs go up, and this is what happens,” Johnson said.