Telesource sues CPA over Tinian airport fund

The contractor for the West Tinian airport improvement project has asked the court to stop the Commonwealth Ports Authority from spending over $1.77 million in retained funds for the project.

Telesource CNMI Inc. filed with the Superior Court a complaint that asked the court to issue a temporary restraining order and an injunction to stop the CPA from spending the retained funds or a portion of it. The company has been claiming the retained fund after the completion of the project.

The retained funds represents about 10 percent of the total amount paid to Telesource in connection with the project, which covered the construction of an 8,600-linear foot asphalt concrete runway, the conversion of the 6,000-linear foot runway into a parallel taxiway, and the construction of related crossover, parallel and partial taxiways at the Tinian airport.

The constructed facility has been in use for more than a year and a half now, according to Telesource’s lawyer, Sean Frink.

Frink asked the court to intervene to prevent the CPA from spending the retained funds or a portion of it after the CPA refused to release the money to his client and its recent solicitation of services for a “complete as-built survey” of the airport, which was estimated to cost some $186,000.

Last Tuesday, Frink said CPA’s attorney, Douglas F. Cushnie, refused to enter into an agreement for CPA not to spend the retained fund pending the final decision on an administrative appeal regarding the monies.

According to the project contract, the reserve fund should be retained by the CPA and not be paid to the contractor until 35 days after final completion of the work and the CPA’s acceptance.

Telesource contended that final acceptance was declared on March 11, 2004, when the project engineer and CPA’s resident engineer conducted a final inspection of the project. Frink said the project engineer, EFC Engineers & Architects Corp., declared that the final acceptance became effective on that date.

Telesource requested the CPA to immediately pay it the retained fund on May 4, more than 35 days after March 11. CPA executive director Carlos Salas, however, refused to release the monies, saying that the CPA was not bound by the engineer’s final acceptance and that the 35-day provision in the contract did not mandate the payment at the end of that period.

Frink said Telesource disputed Salas’ contention, but the executive director decided against the release of the fund, prompting the company to appeal the decision before the CPA Appeal Committee.

After a series of filing documents by Telesource and Salas, the project engineer revoked the final acceptance during the pendency of the appeal.

“The engineer tried to assist Salas in defending his decision by an unexpected maneuver. On the same day that CPA’s response brief was due, the engineer issued a letter that purported to revoke its declaration of final acceptance, citing an alleged misrepresentation by Telesource that the project was complete when the as-built survey was still ongoing,” Frink said.

On Sept. 9, Salas then demanded that Telesource turn over the as-built drawings within five days, threatening the company that CPA would tap the services of a licensed surveyor using a portion of the retained fund. Telesource responded to the demand letter five days later, seeking to clarify what was specifically being demanded from the company.

The following Sept. 17, however, Frink said Salas declared that Telesource breached the project contract, which the company disputed.

CPA later solicited services for the completion of the as-built drawings, sending a request for proposal to Meridian Land Surveying sometime last week.