Yet Another Unlicensed Contractor Debacle

Posted on July 10, 2017

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This story is late in publishing because the AOC (ahem, the judicial council) spent months drawing out our requests for information on a simple inquiry they should have been able to deliver on the same day it was received because what scant information they did provide was readily available to them. But they dragged out their response hoping this article would never see the light of day.

Sorry to disappoint AOC. 

You might vaguely remember a contractor named ABM who was working from the bay area to all points south. They were the other part of the team in the team jacobs fictional entity that went unmentioned by the AOC and their contractors licensing suit and the reason that the AOC intentionally lost their case.

Way back in 2009 it was reported by licensed contractors working on the projects to numerous AOC employees, as the law requires, that both Jacobs, who was awarded the AOC contract, and ABM who was the subcontractor managing 100% of all work done were both unlicensed and both were issuing contracts to licensed entities for the work to be done on courthouses – in addition to doing their own work.

While these reports were submitted to AOC management for over a year and a half, no action was ever taken. In fact, management agreed that it appeared that three entities were unlicensed when you factor in the northern California contractor serving from the bay area north – a company named AGS or Aleut Global Solutions, llc.

From 2006-2010 every courthouse from the Oregon border to the Mexican border was being maintained by unlicensed contractors.

After an AOC employee threatened to file (and eventually did file) a taxpayer suit against all unlicensed entities and the AOC for wasting public funds, the AOC filed suit against 2 of the 3 unlicensed entities and did not file a suit against ABM because they did not have a contractual relationship with them.

In the AOC’s lawsuit against Jacobs, the AOC never pressed the issue or even brought up that ABM, the unlicensed contractor leading the charge for Jacobs, had been issuing contracts to licensed contractors who were legally obligated to report to the government that they were working with an unlicensed entity – and those licensed contractors reported to the government (in this case, the AOC) as required which is the why and how the AOC intentionally lost their case against Jacobs. Jacobs was able to prove, (with the AOC’s assistance), that they had indeed notified the AOC of a change in Jacobs contractors license working on the project. Yet this notification would only appear years later after the suit was filed.

This article is one of the other proverbial shoe dropping.

ABM was awarded the contract to replace Jacobs after they obtained the proper contractors’ license. Almost immediately thereafter, their license expired. In a license check earlier this year, it was discovered that ABM’s license had expired years ago and that the AOC apparently issued a quiet stop work order to ABM while they sorted it out. Affected courthouses were not notified of this quiet order because the AOC wanted to avoid yet another PR disaster related to unlicensed contractors working on their courthouses. So a few months ago, the AOC entered into a novation agreement with ABM to change the unlicensed entity to a licensed entity – another division of ABM.

We have asked the AOC if they have proof that ABM notified them that their unlicensed entity was being replaced by a licensed entity in a public information request. The AOC had no document that they could provide that indicated that ABM had notified the AOC which puts tens of millions of dollars back on the table and that the AOC has apparently swept away. What they did provide was the license expiration timeline and the novation agreement signed this year.

So it appears that the AOC has been working with an unlicensed contractor again for a period of several years. But since the situation parallels the Jacobs case which we strongly believe the AOC intentionally lost, the AOC has apparently chosen to take no action whatsoever against the unlicensed entity, apparently fearing the documents we asked for, which they are unable to produce, will magically turn up and they would lose another lawsuit. So they have chosen to take no action against the contractor.

We continue to urge the state legislature to audit the construction and facilities maintenance programs, along with a slew of other judicial branch employees and at least one of the two judges associations, the Alliance of California Judges. 

____________________________________________________________________________________

Name: Los Angeles Superior Court Employee

Comments: Dear distinguished members of the Joint Legislative Audit Committee,

I am a concerned citizen of the State of California. I am also a (Court or Judicial Council – Eliminate one) employee that is trying to avoid using my name due to fear of making a career limiting choice by speaking out. Today, I write this letter to you to respectfully request that you consider auditing the Judicial Council’s facilities maintenance and construction programs that have thus far escaped legislative scrutiny.

A simple internet search – or even a review of the many complaints filed with the state legislature over the past six years regarding the use of unlicensed contractors, overcharging for projects and paying contractors to fix the damage that they themselves cause are just a few themes of the many complaints.

I’m also concerned about how the 2.3 billion dollar Long Beach courthouse PPP project was awarded, why courthouses that were just built 4 years ago for millions are being shut down and whether or not the Judicial Council is safely managing the buildings that I work in.

I also question the over a thousand dollars per square foot being paid for building new courthouses and how the AOC’s outdated facilities standards might play a part in to these costs when federal authorities are able to build federal courthouses for a fraction of the cost.

I believe that only an audit of the court construction and facilities maintenance programs at the Judicial Council can expose the waste in all of these programs. Please consider auditing the Judicial Council’s facilities maintenance and construction programs before all the money is spent and it is too late.

Sincerely,

A Concerned Court Employee

_____________________________________________________________________________________

Another Call to Audit Court Construction Funds

In recent months, we have highlighted the problems with the half-billion-dollar skyscraper courthouse in San Diego, which lacks a tunnel to the nearby jail; with the Plumas/Sierra Regional Courthouse, a $4.7 million wood-clad structure in the middle of snow country which the AOC had to vacate four years after having built it; and with the ridiculously expensive Long Beach Courthouse.  We now add the recently completed Santa Clara Family Justice Center to the list of California’s overbuilt courthouses.

We bring to your attention the article entitled, “That giant sucking sound? $105 million courthouse debt” from the San José Mercury News, available at this link.  The county’s chief executive officer describes the new courthouse, which features “gleaming Grecian columns clad in ornamental stone imported from Italy,” as “an absolute drain on the budget.”  In the words of the president of the Superior Court Professional Employees’ Association, “The courthouse may someday be featured in Architectural Digest, but right now it’s proving to be a financial albatross around the necks of court workers and the public we serve.”

Much of the money for the new Santa Clara courthouse came from SB 1407, the bill which authorized the issuance of $5 billion in bonds to finance courthouse construction.  Those bonds are financed primarily by the $30 and $35 assessments we impose on misdemeanors and infractions.

All the fancy stone cladding in California can’t cover an ugly truth: The judicial branch has financed the construction of a handful of highly ornate courthouses with money collected disproportionately from those who can least afford to pay.

We repeat our call for an audit of the AOC’s construction and maintenance wing.  We have a duty to ensure that the money we extract in fines and fees goes to the best possible use.  We doubt that the purchase of imported stone cladding makes the cut.

Directors, Alliance of California Judges