Engineer sues Agua SUD over sewer project payments

Nearing completion of its Palmview wastewater project, the Agua Special Utility District is being sued by the project engineer which alleges the utility district is refusing to pay for services already provided.

S&B Infrastructure, a Houston-based company that partly designed the project to bring sewer services to the city of Palmview, filed a lawsuit against Agua SUD in September alleging the utility district refused to pay outstanding invoices.

The company stated that in July 2016, they agreed to provide onsite construction management and inspection services for the separate phases of the project for a period of 18 months.

Under those terms, the contract was scheduled to terminate on Dec. 31, 2018, and the negotiated price was based on the those 18 months.

“Under the agreements, construction management work performed by S&B beyond the contracted for 18 months was considered compensatory additional work,” the lawsuit stated.

The project did, in fact, extended beyond those 18 months due to multiple delays.

“All the while, Agua continually requested S&B provide additional onsite construction management and inspection services,” S&B stated in the suit, adding that their period of service was extended 12 times through work authorizations (WAs) or supplemental work authorizations (SWAs).

On that last extension, signed on May 4, S&B’s period of service was extended to Sept. 30.

“Amazingly on May 18, 2020, fourteen days after the signing SWA 11, Agua’s lawyers wrote to S&B informing it, for the first time, that Agua was of the opinion that S&B was required to perform work under WA 12 and all SWAs associated therewith for free until all the general contractors’ achieved final completion (of) their work no matter how long it took those general contractors to finish,” according to S&B’s original petition.

S&B alleges Agua SUD now owes them no less than $744,421.62 in past due invoices that cover work performed from 2018 through 2020 for the wastewater project. They allege Agua refuses to pay them.

In a response filed by Agua SUD on Oct. 26, all allegations were denied.

“Agua SUD denies that it breached the agreement and denies that it failed to make all payments due to S&B Infrastructure, LTD (“S&B”) pursuant to the agreement between Agua SUD and S&B,” the utility district stated.

Specifically, they allege that S&B executed SWA 11 after Agua SUD sent them a notice of deficiency and told them they would refuse to approve additional payment.

“Furthermore, S&B’s previous Project Manager made material representations that S&B would perform any necessary additional services without compensation,” Agua SUD stated. “These representations were made based on an understanding the ongoing services by S&B were an underlying obligation of the agreement, and these representations were made to Agua SUD during official board meetings.”

Under the terms of the agreement, Agua SUD argued in the response, S&B is not entitled to any more payments.

They also argued that it was S&B that first breached the contract with Agua SUD by “failing to perform its services pursuant to the obligations set forth in the terms and provisions of the Professional Services Agreement,” they stated in the response.

The allegations included failing to perform its obligations on the project through to its completion, Agua SUD argued.

“As a result, (S&B) is barred from recovering any amount from Agua SUD,” they stated.