Getting The Shaft
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We do lots of investigations into government waste, and the government lawyers who rack up tons of bills in YOUR NAME. That’s why we’re helping a Houston-area construction company that is GETTING THE SHAFT from the Harris County Department of Education.
“I didn’t even introduce myself… My name is John Shaft”.
As a teenager, this was one of my favorite movies…
Shaft… the story of a black private detective battling the Italian mob…
I was thinking about Shaft the other day… because we’re now investigating dozens of Houston companies that quite frankly are getting the shaft too… While you pay for it.
“I want to welcome everyone to come into HCDE’s brand new Adult Education Facility.”
It was July of last year… And they were celebrating at the Harris County Department of Education…
“We’re on a mission to recreate what alternative education looks like not only in Houston, Texas, but the entire country,” said HCDE Superintendent James Colbert Jr.
This elected county education board usually operates under the radar of public scrutiny… But spends a ton of your tax money.
Their budget last year was 173 million dollars.
From head start programs for kids to alternative education for adults.
And it’s the adults that were going to be taught here in this brand-new building on Irvington Boulevard.
“We want to create a space that was really inviting for the students.”
But more than a year after the building was opened… the Harris County Department of Education hadn’t bothered to finish paying the construction company who built it… and it was no small change.
“It’s infuriating to be getting screwed by this entity that we did this great job for,” said Dustin Hall, from Paradigm Construction.
Days after we began asking for records of the legal fees we were racking up while we cheated this construction company… HCDE suddenly paid the ten percent of the contract still remaining… 764,000 dollars.
“I have no other explanation why after 14 months all of a sudden a few weeks after you submitted that, that we got it released,” added Hall.
“We will move to a vote. All in favor? Passes unanimously.”
But the story doesn’t end there… three years after Houston based Paradigm Construction was first awarded the contract to build the education center…
Their legal battle with HCDE over the monies they say are still owed is far from over.
And we’ve discovered they’re not the only construction company complaining that the County Education Department is teaching its students a bad lesson… On how to shaft someone.
“So that’s it in a nutshell man. Just wicked people… Just evil people,” affirmed Tim Dixon.
Paradigm had bid and won the contract with the Harris County Department of Education back in September of 2021.
Months later, the company was told it could demolish what was there and get the land ready for building… But it couldn’t start actual construction yet because of a play apparently choreographed by the government lawyers, who would then benefit from this plan in legal fees.
In fact… Paradigm didn’t get permission to build until seven months after they had bid the project.
The architectural drawings were incomplete… The HCDE repeatedly failed to get a permit for months.
The Harris County Education folks even sued their own architect because of this very delay… it cost Paradigm and dozens of its subcontractors a ton of money.
“Seven months during Covid is an eternity,” said Dustin Hall.
It was all over the news… Construction prices were rising in the wake of the Covid pandemic.
“I’ve been in construction for years, it’s unlike anything I’ve ever witnessed,” stated Dustin Hall.
Lumber and plywood would rise 63 percent in a matter of months. Copper up 68 percent. Aluminum 53 percent. Steel mill products up a whopping 124 percent.
“Prices were going up amounts that we had not seen in ages, and it was happening daily,” added Hall.
Look at the RFP from the Department of Education… It only asked for prices to be locked in for 60 days.
That other delay clearly wasn’t Paradigm’s fault… yet HCDE has refused to pay for the increased costs of materials… dozens of subcontractors have been left holding the bag.
But HCDE’s attorneys advised them to go ahead and enter into the contract and then try to get the construction companies to eat the increase.
Yet HCDE has refused to pay for the increased cost of materials. Dozens of Houston subcontractors have been left holding the bag.
Paradigm is now suing HCDE for breach of contract… And the cost of the County shaft may add up to 2.4 million dollars.
“You’re talking about lots of subcontractors small businesses that are owed this money,” explained Hall.
Over at MS Glass in Jersey Village… Raj Karimi doesn’t mince words.
“If it was up to me, I’d go back and take all my glass and windows out of the building so I can get paid, because the work is done, I should be paid for my work.”
This glass glazing company is a minority-owned… Feeds 65 families… But like dozens of other companies… Money for their work on the Adult Education Center building is tied up in the Paradigm lawsuit.
“To work for the government and not get paid that’s pretty messed up,” added Karimi. “I mean, you’re screwing a little guy.”
“I obviously don’t know anything about construction,” said James Colbert Jr. during a deposition.
You wouldn’t expect a school official to understand construction, but when multiple construction companies are screaming you shafted them… something is very wrong.
“Paradigm isn’t the only general contractor who has claimed additional costs as a result of delays in issuing a notice to proceed, right?”
Colbert: “Correct.”
“In the 2023/24 school year Highpoint Middle School building will be in a new state of the art building.”
That new nine-million-dollar state of the art campus for troubled teens was built for taxpayers by construction company CA Walker.
They also faced long delays before they could begin construction because of… Guess what… A lack of permits.
“Adding 300,000 to their 7-million-dollar contract.”
Colbert: “Yes.”
CA Walker threatened to walk off the job if they didn’t get paid more… They got their money…
But Paradigm and Construction Limited and all their subcontractors stayed on the job despite the escalating cost of materials… You know what they were paid for their trouble? They got zero.
“I was willing to concede and give money, but I felt that I was being extorted,” said Colbert. “Your client is extremely greedy, the point of extortion.”
“You know it’s frustrating there’s no greed in this whatsoever. We provided very detailed backup documentation from every single sub related to this claim,” said Dustin Hall.
“And have you done anything to interpret any of the subcontracts that were provided…?”
“Zero,” responded Colbert.
And Paradigm provided a detailed account of all the price increases that HCDE caused on the project with its long delays… The cost of the drywall alone was up 592,000 dollars.
“So you agreed that a significant chunk of this claim was reasonable didn’t you?”
“I agree if the contract allowed for monetary damages than it would be reasonable yes,” replied Charles Scheive.
He works for LAN… The company that was hired to manage these school building projects.
HCDE financial records show they have already been paid 1.1 million dollars in the last three years.
But even though the buildings are done… The meter is still running as LAN tries to help HCDE skip out from paying the tab for the construction delays.
“Now you agree that Paradigm was not responsible for the permitting delays, right?” “Correct,” said Shieve.
“If the permit is not available for Paradigm to begin construction as contemplated under contract it would interfere with their ability to do their work wouldn’t it?” “Yes,” Shieve confirmed.
“They just stabbed us in the back at every turn,” stated Tim Dixon.
Oh wait… That’s yet another contractor who claims they were cheated by the folks at the Harris County Department of Education.
And again it was the failure of HCDE to get the required building permits to start construction… This time the delay was four months.
Construction Limited says HCDE has an outstanding balance of 995,462 dollars for work already performed.
“When you have three different firms who had the same exact case brought by different attorneys for the same basis. It’s not just us that they’re trying to do this to,” said Dustin Hall.
HCDE lawyers have temporarily stalled the lawsuits by filing an appeal… Seeking government immunity… Delaying the possible payment for so many companies who say Texas law is clearly on their side.
“We just got bad lawyers that are telling them to do something that they can’t win and it’s going to cost a fortune,” explained Tim Dixon.
“This is going to end up getting paid. We were entitled to the money and instead of just getting it resolved this drags out for over a year, it just makes no sense,” Hall added.
But the delays do create a bigger pay day for the lawyers. Spalding Nichols and Langois fought our request to see their invoices… Even though you pay them all.
HCDE wouldn’t even tell us how much they… I mean you were spending on these legal fights with angry construction companies, even though it’s your money.
Wayne [over the phone] “How much of my money and everybody else’s money you have paid a particular vendor? That’s not confidential under law…”
Winford Adams from the HCDE: “That’s a valid point.”
“Within your organization are you the person who has ultimately authority to pay claims or settle disputes?
James Colbert: “Yes.”
“And is your authority subject to approval by the board of trustees?” James Colbert: “Depending.”
We’ve looked at the HCDE organizational chart… Above Mr. Colbert is an elected board of trustees.
And right above them… The big boss… You, the public.
So let me ask you. Do you really want to spend hundreds of thousands of dollars more on lawyers and consultants instead of just paying the darn money we owe?
Maybe there’s a lesson in that too.
Wayne: “Would you ever work on another school construction project after this?”
Tim Dixon: “I guess if they put a gun to my grandchild’s head and said do it or were going to kill your family… But besides that no.”
