NCD980602163_20050228_Warren County PCB Landfill_SERB C_IT Contract correspondence, 2002 - 2005-OCR

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/-3/10/2005 11:02 9197153060 NCDEt'-lR PAGE 03/04
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STATE OF NORTH CAROLINA ►f'il~No.
04 CVS 177
WARREN In The General Court Of Justice County O District [Kl Superior Court Division
AddWonal File Nt1mbers ro~x ASSOCIATES, LLC
VERSUS
Mici'.,·esc Soil Ren1cdia1ion, Inc .. Shpw l::nvitonmcnt,d nnd SUBPOENA ln:"r;;.,,rncturc. Inc. n:1d Tl1c ln.,urnncc Company of the S:atc of PA G.S. 1A•1. Ruic 45
P.,rty F:~-:;u,;5/.'ng Suvpo~ne I NOTE TO PARTIES NOT REPRESENTED BY COUNSEL: Subpoenas may be produced at your request, but 0 :;:,, •e:i:;1,,,r.firr 00 Oolnr.d.,,,, mus/ b-s sigr1ed and issu~d by th9 office or the CIGrl< of SvpGrior Court. or by a ma9istr&t<: or j udge.
tl~me And Addff:so Of Per~on Subposneec.' ·\ .. '•-f -.,___.)' Alternar,; Address j,-..,,.. .: ,;(11,,
TO i':C Dr::NR., Division of Was1·c Mann~~mcn1 NC DENR, Division of Waste Mann_ge,ncnt
i 646 :,._foil Service Center 40 I Oberlin Road, Suite 150
R.alei Qh. J\C 2 7699-1646 Raleigh. NC 2i605 --·••"· ---~ --·--· T1:l12phone No I Tc!,p.',u,,,. !·ic.
(9 I 9) i33-4996 (919) 733-499(,
YOU ARE COMMANDED TO: (CMCk ell that eppty): n appear anrJ testify, in t11e above entitlecl action, before the court at the place, date and time indicated below.
O appear and testify. in the above entitled action, at a deposition at the place, date and time indicated below.
0 produce and permit inspection and copying of the following items, at the place. date and time indicated below.
D See attached list. (List lwG If sp;icc svfflclont)
I. Produce copies ofnll pre-bid questionnaires ;ind tcspol'lscs to bicldcrqucsrions rec eived by you from any and all conrracrors for
NC SCO Project No. 0 I 04401() I A.
~ Produce co pie, of all bids and Forms of Proposal received by you from any and all contractors for NC SCO Project No. L ,
010440101.!\.
3, Prodt1Cc; copies of any and all doc;umcn1s, inclllding. but not limited tu, corrcsponclcnc;c, technical specifications, spreadsheets,
graph,. rn.~t annly~c, oi· other reports, received by you from all contr.ictms for NC SCO Project No. 0 I 044010 I A 011 or before the
hid dttc date for the Project of Dcccmhcr 22 , 2000 and on or before the cxi::cution of the contract with Shaw on .February 16. 200 I.
Ntimo find LOC.'HiCJ) or Cout11P/3C() or Doµo~i!1on/Pf,9C! To PrOIJllCr. oarg To l\pp~srlf>roduce
Herring MeBcnnctt Mili, & Finkelstein, PLLC 03/1 8/2005
Two Ha:1110\'Cr Square, Suite 1860 Tlmg To Appgsr/Produce
R8leiµh. NC 2i60l l l:00 [I AM □PM
11;;,me A/lC! i\ddr(J.~!. 01 A1>plic,,,,, 01 l\pplitntll'S 1\/IMn~y O,qlo
Mark Andcr~on Fin!<clstcin 02/28/2005
Herrinµ Mc Bennett Mill, & Finkelstein, PLLC Signe~(/A ;;r-: , . I., .
PO Rox 1677. Ra lci"h, NC 27602 )v,../'f...,•;;::::___
TOlf'!f)IJOnP No. I O Deputy C$C D /\.ssit.r,1nl CSC D Cle1k 01 Superio1 Court D Superior Coull Judge
(919) 821 -1 860 D Mapl~lrate _ ... 00 Al(Qrnny/OA 0 DiWicr :,~'.~~:!'.'.~~~ "-----... _ _
_ _I__ _RETUR~ QF_S_El3VICE ___ I ··--__ ....... , ...• ,·-·-·· "' ....
I certify this subpoena was received and served on the person subpoenaed as follows:
By CJ personal delivery.
0 registered or certified mail, rncei;it requested and attach0d. D telephone COl"'l municatlon (l'~r u.so O"'Y 1,y 1hr. ,,.o,r.r;rrt-omco re,· .,..;r.-,ess wapoe.oeed ro eppe,er ano· testily./ O I was urn;ble l.o serve lhis subpoena.
----· ·-·----·--·
1 S1:-Nit;r. ,ee D P~i:1 Oa!e Ser,ed
0 Due :s
I NOTE TO PERSON REQUESTING SUBPOENA: A copy of this svopoena must be delivered. mailed or faxed lo the atlomey far eacr. party ir1 this
c::ise. If a party is no! rspr.-sef';/ed by en ettorMy. tM copy musl b9 mailgd or do/lvored tc the party. Tllis docs no/ Jpply In cr/minJI coses.
AOC•G-1 OC, Rev. 10103
,r; 2~J3 Adl'r-ini,llaliv~ O'r;c~ or 111,;o Col:'ls
\ \
StiawThe Shaw Group Inc:"
July 22, 2002
North Carolina Department of Environment and Natural Resources
Division of Waste Management
1646 Mail Service Center
Raleigh, NC 27699-1646
Attn: Ms. Patricia Backus, P .E.
Project Manager
[phone], ext 308 phone
[phone] fax
Re: Warren County PCB Landfill Detoxification Contract
NCSCO ID #0104401010A, Shaw Project #827062
Requirement for Engineering License
Dear Ms. Backus,
Shaw Environmental & Infrastructure, Inc.
200 Horizon Center Blvd.
Trenton, NJ 08691-1904
Direct Dial: 609-588-6373
FAX: [phone]
/~CEIVE/j
(, J\ltit w:tl
This is to confirm our telephone conversation of this morning regarding the contract requirement for an
engineering firm license and the complications that this is causing in our efforts to determine which Shaw
subsidiary will need to be the bonded contracting entity.
As you know, the contract scope of work is on a design/build basis, and thus requires the contractor to have
both engineering and general contractor licenses in the State of North Carolina. Shaw is working to obtain
these licenses in our own name since our purchase of the former contractor, The IT Group. However, it
appears that the obtaining the engineering license will take longer than anticipated. This is due to certain
requirements regarding the corporate structure of the company to be licensed that are unique to North
Carolina. These will require Shaw to set up a separate subsidiary company to hold the license, as well as
several other time-consuming intermediate steps.
As we discussed, the design phase of the project is substantially complete, with all required permits
obtained and construction well under way. In the event that further engineering work is required prior to
the time that Shaw obtains the engineering license, we will subcontract this work to a firm with the
appropriate licenses, as we agreed in our conversation. This temporary alternative will greatly simplify the
process of obtaining the required bonds, which as you know is an urgent matter.
Work has been in progress since the sale to obtain a North Carolina general contractors' license that can
clearly be connected to the contracting subsidiary. I will keep you informed of the results.
Shaw Environmental & Infrastructure, Inc.
~ StiawToe Shaw Group Inc:"
If you have any further questions or concerns on this matter please contact me at [phone] or at
[e-mail].
Sincerely, ./7 ~ ,;;)_,,_/---._/
Gary W. Duke, P.E.
Project Manager
Shaw Environmental, Inc.
Duke file c:\mydocs\nclf\corresDENR\7-22-02 eng license.doc
AVA
NCDENR
North Carolina Department of Environment and Natural Resources
Division of Purchase and Services
Michael F. Easley, Governor Laird A. Davison, Director
VIA FAX AND CERTIFIED MAIL
Mr. Thomas Horst, Executive Vice President
Shaw Environmental Inc.
200 Horizon Center Blvd.
Trenton, NJ 0869 I -I 904
June 6, 2002
RE: Warren County PCB Landfill Detoxification Contract
NCSCO ID #0104401010A, IT Corp. Project #827062
Dear Mr. Horst:
William G. Ross Jr., Secretary
We have reviewed Mr. Gary Duke's response of May 23, 2002 concerning assumption of this contract and
Bankruptcy Judge Mary Walrath's order authorizing the sale of The IT Group to The Shaw Group. We do not object
to Shaw's assumption of this contract as long as Shaw obtains the bonding and licenses required by the contract.
We agree that Shaw has corrected the conditions of default that were listed in the Notice of Default issued on March
1, 2002 and has shown intent to complete the project according to its terms and provisions. Therefore, this letter is
formal notice that we are rescinding the Notice of Default.
Shortly before receiving your response, we received correspondence from Kemper stating that the project bonds
would not be assigned to Shaw. We received this notification on May 20, 2002 and are using this as the ending date
of the bonds. Since the bonds were in place during the period covered by Application for Payment Nos. 11, 12, 13
and 14, DENR has released those invoices for payment. However, we cannot make additional payments until Shaw
obtains performance and payment bonds for the total amount of the project ($6,658,539). The required fom1S for
these bonds are included.
In addition to the above, Shaw must also obtain the business and professional licenses to complete the assumption of
this contract. We understand that you were authorized by the bankruptcy order to operate under The IT Group's
licenses for a transitional period and that you in the process of obtaining licenses in Shaw's name as soon as
possible. Please keep us informed of your progress.
If you require additional information, please contact Ms. Pat Backus at [phone] ext. 308.
Sincerely,
Laird A Davison, Director
Division of Purchase and Services
Enclosures (2)
cc: Zack Abegumin, State Construction Office
Mike Kelly, DENR
Gary Duke, Shaw Environment and Infrastructure
Jim Cloonan, Earth Tech, Inc
Patricia Backus, DENR-DWM
Stephen Beatty, Kemper Insurance
1605 Mail Service Center, Raleigh, North Carolina 27699-1605
Phone: [phone] \ FAX: [phone] \ Internet: www.admin,em.state.nc.us/purchase/
An Equal Opportunity\ Affirmative Action Employer -50% Recycled\ I 0% Post Consumer Paper
Form OC-10
SECTION 308 FORM OF PAYMENT BOND
Date of Contract:
Date of Execution:
Name of Principal:
(Contractor)
Name of Surety:
Name of Contracting Body:
Amount of Bond:
Project:
KNOW ALL MEN BY THESE PRESENTS, that we, the principal and surety above named, are held and
fim1ly bound unto the above named contracting body, hereinafter called the contracting body, in the penal sum of
the amount stated above for the payment of which sum well and truly to be made, we bind ourselves, our heirs,
executors, administrators, and successors, jointly and severally, firmly by these presents.
THE CONDITION OF THIS OBLIGATION IS SUCH, that whereas the principal entered into a certain
contract with the contracting body identified as shown above and hereto attached:
NOW, THEREFORE, if the principal shall promptly make payment to all persons supplying labor/material
in the prosecution of the work provided for in said contract, and any and all duly authorized modifications of said
contract that may hereafter be made, notice of which modifications to the surety being hereby waived, then this
obligation to be void; otherwise to remain in full force and virtue.
IN WITNESS WHEREOF, the above-bounden parties have executed this instrument under their several
seals on the date indicated above, the name and corporate seal of each corporate party being hereto affixed and these
presents duly signed by its undersigned representative, pursuant to authority of its governing body.
Executed in _____________________ counterparts.
Witness:
(Proprietorship or Partnership
Attest: (Corporation)
By:
Contractor: (Trade or Corporate
Name)
Title:
(Owner, Partner, or Corp.
Pres. or Vice Pres. only)
Date of Contract:
Date of Execution:
Name of Principal:
(Contractor)
Name of Surety:
Name of Contracting Body:
Amount of Bond:
Project:
FORM OF PERFORMANCE BOND
KNOW ALL MEN BY THESE PRESENTS, that we, the principal and surety above named, are held and
firmly bound unto the above named contracting body, hereinafter called the contracting body, in the penal sum of
the amount stated above for the payment of which sum well and truly to be made, we bind, ourselves, our heirs,
executors, administrators, and successors, jointly and severally, firmly by these presents.
THE CONDITION OF THIS OBLIGATION JS SUCH, that whereas the principal entered into a certain
contract with the contracting body, identified as shown above and hereto attached:
NOW, THEREFORE, if the principal shall well and truly perform and fulfill all the undertakings,
covenants, terms, conditions and agreements of said contract during the original term of said contract and any
extensions thereof that may be granted by the contracting body, with or without notice to the surety, and during the
life of any guaranty required under the contract, and shall also well and truly perform and fulfill all the undertakings,
covenants, terms, conditions and agreements of any and all duly authorized modifications of said contract that may
hereafter be made, notice of which modifications to the ~urety being hereby waived, then, this obligation to be void;
otherwise to remain in full force and virtue.
By:
Title:
(Corp. Sec. or Asst.
Sec. only)
Witness:
Countersigned:
(N.C. Licensed Resident Agent)
Name and Address-Surety Agency
Surety Company Name and N.C.
Regional or Branch Office Address
(Corporate Seal)
(Surety Company)
By:
Title:
(Attorney in Fact)
(Surety Corporate Seal)
\ IN WITNESS WHEREOF, the above-bounden parties have executed this instrument under their several
seals on the date indicated above, the name and corporate seal of each corporate party being hereto affixed and these
presents duly signed by its undersigned representative, pursuant to authority of its governing body.
Executed in
Witness:
(Proprietorship or Partnership)
Attest: (Corporation)
By:
Title:
(Corp. Sec. or Asst. Sec.
only)
Witness:
Countersigned:
(N.C. Licensed Resident Agent)
Name and Address-Surety Agency
By:
Title:
By:
Title:
Surety Company Name and N.C.
Regional or Branch Office Address
counterparts.
Contractor: (Trade or Corporate
Name)
(Owner, Partner, or Corp.
Pres. or Vice Pres. only)
(Corporate Seal)
(Surety Company)
(Attorney in Fact)
(Surety Corporate Seal)
Patricia M. Backus, PE
Division of Waste Management
401 Oberlin Road, Suite 150
Raleigh, NC 27605
Phone: [phone] ext. 308
Fax: [phone]
Fax
To: Laird Davison
Fax: [phone]
Phone:
NCDENR
From: Pat Backus
Pages: 3
Date: May 8, 2002
Re: Lette~ Include to IT/Shaw CC:
0 Urgent □ For Review □ Please Comment □ Please Reply D Please Recycle
• Comments:
I. t
.... ~1,~A .9!'~ .. HCDE ...... N-R
North Carolina Department of Environment and Natural Resources
• Division of Purchase and Services
Michael F. Easley, GOYemOr Laird Davison, Director Wi_lliam G. ~O!S }fu &ecr'etary
March 1, 2002
NOTICE OF DEFAULT
CERTIFIED MAIL
RETURN RECEIPT REQUESTED
Mr. Gary L. Gardner, President
Commercial Engineering and Construction Group
The IT Group, Inc.
200 Hori7.on Center Blvd.
Trenton, NJ 08691-1904
RE: Warren County PCB Landfill Detoxification Contract
NCSCO ID #010440 l 0 1 0A, 1T Corp. Project #827062
Dear Mr. Gardner:
The Owner State of North Carolina has reviewed Gary Duke's letter dated February 14, 2002, in response to its
letter dated January 24. 2002. rt is evident from Mr. Duke's letter that The IT Group cannot as~ure the State of
North Carolina that it can and will complete the Warren County PCB Landfill Detoxification Contract per the
contract terms and conditions. It is also noted that The IT Group ha.s not made timely payments to aU of its
subcontractors, which has placed the timely performance of the contract in jeopard)•, negatively impacted The JT
Group's working relationsrups with various subcontractors, and inserted an clement of delay into the master
schedule for the project
Pursuant to the Form of Construction Contract to include, but not limited to, Article 29 of the General Conditions of
the contract, the State of North Carolina hereby declares The IT Group in default on the referenced contract
Pursuant to the snid contract as amended and supplemented, by copy of this letter we arc making fonna1 demand to
the surety, Kemper Insurance Companies, to take over the project within fifteen days and complete the perfonnance
of the Construction Contract in a timely fashion.
1605Mail Service Center, Raleigh, North Carolina 27699-1605
Phone: [phone] \ FAA: 919-715-0684 \ Internet www.admin.enr.state.nc.us/purchase/
An Equal Opportunity\ Affirmative Action~• -50% Recycled\ 10% Post Consumer Paper
03/04/2002 13:21 9197150684 DENR PURCHASE/SVCS PAGE 02/02
The Owner expects to meet with the surety and its representatives to discuss the progr£ss of The IT Group on the
project, and would not object to The IT Group continuing to J)crfonn under the supervii;ion of the !nlrety. However,
the Owner is obligat!!d under the terms and conditions of the Fonn of Construction Contract to notify the surety of
the conditions of default in order to preserve its rights under the various bond agreements insuring the project.
Sincertly,
Qw G.~ a~
Laird A. Davison, Director
Division of Purchase and Servicts
cc: Stephen Butty, Kemper Insurance, (Ccnificd Mail-Return Receipt Requested)
Zack Abegunrin, State Constniction Office
_ .MJ~e ;,<,e,iy. 'QE..N.li.. ~ _
Gary Duke, The IT Group, Inc.
Jim Cloonan, Earth Tech Inc.
Patricia Backus, DENR-DWM
•·
::u.::, ( J. ;_!tJOOr..+ vi=..,,,, , ._,1,v1 ,,..,._J~r ._J V-....J._J
~~
MCDENR
North Carolina Department of Environment and Natural Resources
• Division of Purchase and Services
Michael F. Easley, Governor Laird Davison, Director William G. Ro.~ Jr.!l. &ecretary
March 1, 2002
NOTICE OF DEFAULT
CERTIFIED MAIL
RETURN RECEIPT REQVESTED
Mr. Gary L. Gardner, President
Commercial Engineering and Construction Group
The IT Group, Inc.
200 Horizon Center Blvd.
Trenton, NJ 08691-1904
RE: Warren County PCB Landfill Detoxification Contract
NCSCO ID #0 I 0440 IO l OA, IT Corp. Project #827062
Dear Mr. Gardner:
The Owner State of North Carolina has reviewed Gary Duke's letter dated February 14, 2002, in response to its
Jetter dated January 24, 2002 . rt is evident from Mr. Duke's letter that The IT Group cannot as$ure the State of
North Carolina that it can and will complete the Warren County PCB Landfill Detoxification Contract per the
contract terms and conditions. It is also noted that The IT Group has not made timely payments to all of its
subcontractors, which has placed the timely performance of the contract in jeopardy. negatively impacted The JT
Group's working relationships with various subcontractors, and inserted an element of delay into the master
schedule for the project.
Pursuant to the Form of Construction Contract to include, but not limited to, Article 29 of the General Conditions of
the contract, the State of North Carolina hereby declares The IT Group in default on the Teferenced contract.
Pursuant to the snid contract as amended and supplemented, by copy of this letter we are making formal demand to
the surety, Kemper Insurance Companie$, to take over the project within fifteen days and complete the perfonnance
of the Construction Contract in a timely fashion.
1605 Mail Service Center, Raleigh, North Carolina 27699-1605
Phone: [phone] \ F/J;X: 919-715-0684 \ Internet www.admin.enr.state.nc.us/purchase/
An Equal Opportunity\ Affirmative Action Enl,>la,er -50% Recycled\ 10% Post Consumer Paper
r -•.
03/04 /2002 13:21 9197150684 DENR PURCHASE /SVCS PAGE 02 /02
The Owner expects t.o meet with the surety and its representatives to discuss the progn:ss of The IT Group on the
project, and would not object to The IT Group continuing to perfonn under the supervision of the surety. However,
the Owner is obli.gat!!d under the terms and conditions of the Fonn of Construction Contract to notify the surety of
the conditions of default in order to preserve: its rights under the various bond agreements insuring the project.
Sincerely,
Gl~ G.~ a~
Laird A. Davison, Director
Division of Purchase and Services
cc: Stephen Beatty, Kemper Insurance, (Certified Mail-Return Receipt Requested)
Zack Abegunrin, State Construction Office
... MJ~e 1',e,iy, Q~_R. •. ~ ·-
Gary Duke, The IT Group, Inc.
Jim Cloonan, Earth Tech Inc.
Patricia Backus, DENR-DWM
I'
Patricia M. Backus, PE
Division of Waste Management
401 Oberlin Road, Suite 150
Raleigh, NC 27605
Phone: [phone] ext. 308
Fax: [phone]
Fax
From: Pat Backus
Pages: 8
Phone: ~Oft -.538 -4,3 '1_3
GYlJrgent □ For Review □ Please Comment □ Please Reply
• Comments:
D Please Recycle
Patricia M. Backus, PE
Division of Waste Management
401 Oberlin Road, Suite 150
Raleigh, NC 27605
Phone: [phone] ext. 308
Fax: [phone]
NCDENR
Fax
To: Gary Duke From: Pat Backus
~-3 Fax: ~ ft,o9-SF8 -C,,3Po Pages: 3
Phone: [phone] Date: March 4, 2002
Re: Letter of Default
0 Urgent □ For Review □ Please Comment □ Please Reply
• Comments:
This is the letter. It is being mailed today.
Pat
---.b_~ i) _,)
~~~~
~7-li_~.
'Pa_:r
□ Please Recycle
ACTIUITY REPORT(TX)
03.05.2002 08:08
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~~
MCDENR
North Carolina Department of Environment and Natural Resources
• Division of Purchase and Services
Michael F. Ea&ley, Gowmor Laird Davison, Director W~isn G. Ro~~ ~ry
March 1, 2002
NOTICE OF DEFAULT
CERTlnED MAIL
RETURN RECEIPT REQUESTED
Mr. Gary L. Gardner, President
Commercial Engineerini and Construction Group
The IT Group. Inc.
200 Hori7.0n Center Blvd.
Trenton, NJ 08691-1904
RE: WaTTen County PCB Landfill Detoxification Contract
NCSCO ID #0 l 0440 IO 1 OA, IT Corp. Projea #827062
Dear Mr. Gardner:
The Owner State of North Carolina has reviewed Gary Duke's lentr dated February 14, 2002, in response to its
Jetter dated January 24. 2002. rt is evident from Mr. Duke's letter that The IT Group cannot as:!iure the State of
Nonh Carolina that it can znd will complete the Warm, County PCB Landfill Detoxification Contract per the
contract tCnn$ and conditions. It is also noted that The lT Group has not made timely payments to all of its
subcontractors, which has placed the timely perfonnancc of the contract in jeopard)•. negatively impacted The TT
Group's working relationshlps with various subcontractors, and insencd an element of delay into the master
schedule for the project.
Pursuant to the Form of Construction Contract to include, but not limited to, Article 29 of the General Conditions of
the contract, the State of North Carolina hereby declares The IT Group in default on the Tefercnc~d contract
Pursuant to the snid contract as amended and supplemented, by copy of this letter we arc making fonnal demand to
the surer)·, Kemper insurance Companies, to take over the project within fifteen days and complete the perfonnance
of the Construction Contract in a timety fashion.
1605 Mail Service Center, Raleigh, North Carolina 27699-1605
Phone: [phone] \ FAA: 919-715-0684 \ Internet www.admin.enr.state.nc.us/purchase/
An Equal Ol)f>OltUnity \ Affirms live Action Enl>bt• -50% Recycled\ 10% Post Consumer Paper
I '
T
T
The Owner expects u, meet with the surety and its representatives to discuss the progress of The IT GToup on the
project, and would not object to The IT Group continuing to perform under the supervi.~ion of the surety. However,
the Owner is obligated under !he tmns and conditions of the Form of Construction Contratt to notify the surety of
the conditions of default in order to preserve hs rights under lbc various bond agreements insuring the project.
Sincerely,
C)lo;.J a.. a~
Laird A. Davison, Director
Division of Purchase and Services
cc: Stephen Beatty, Kemper lnsurancc, (Certified Mail-Return Receipt Requested)
Za.clc Abegunrin, State Constniction Office
_ MJ~.e ,<.eHY., Q~IL .. _
Gary Duke, The IT Oroup, Ine.
Jim Cloonan. Earth Tech Inc.
Patricia Backus, D'ENR-DWM
•·
Patricia M. Backus, PE
Division of Waste Management
401 Oberlin Road, Suite 150
Raleigh, NC 27605
Phone: [phone] ext. 308
Fax: [phone]
Fax
To: Jim Cloonan
Fax: [phone]
Phone: [phone]
Re: Letter of Default to IT
From:
Pages:
Date:
~ .· ·i1illllllr. :·
NCDENR
Pat Backus
3
March 4, 2002
John Funk
'ifs 4 -(,, .;l59 4: ::::
Earth Tech , Raleigh
0 Urgent D For Review D Please Comment □ Please Reply D Please Recycle
• Comments:
This is the letter. It is being sent today.
Pat
¾
North Carolina
Department of Environment and Natural Resources
Division of Purchase and Services
Michael F. Easley, Governor
William G. Ross Jr., Secretary
Laird A. Davison, Director
February 22, 2002
CERTIFIED MAIL
RETURN RECEIPT REQUESTED
Mr. Gary L. Gardner, President
Commercial Engineering and Construction Group
The IT Group, Inc.
200 Horizon Center Blvd
Trenton, NJ 08691-1904
RE: Warren County PCB Landfill Detoxification Contract
NCSCO ID #0104401010A, IT Corp Project #827062
Dear Mr. Gardner:
In response to the letter of February 14, 2002 from Mr. Gary Duke, it is evident that The IT
Group cannot advise the State of North Carolina of when or if it can proceed with the work at the
Warren County PCB Landfill. We conclude that The IT Group cannot assure the State of its
willingness or ability to proceed with the contract, and that any assurance would be contingent
upon a successful buyer's willingness to proceed.
Based upon The IT Group's inability to provide adequate and reasonable assurance to the State to
complete its contract and pursuant to the Contract and to Article 29 of the General Conditions, we
declare The IT Group to be in default on the referenced project. Pursuant to said Contract and
Article 29, I am making formal demand by copy ofthis letter to the Surety, Kemper Insurance, to
take over the project within fifteen days and complete the performance of the Construction
Contract in a timely fashion.
Sincerely,
Laird A. Davison, Director
Division of Purchase and Services
cc: Stephen Beatty, Kemper Insurance
Zack Abegunrin, State Construction Office
Mike Kelly, DENR
Gary Duke, The IT Group, Inc.
Jim Cloonan, Earth Tech Inc.
Patricia Backus, DENR-DWM
1605 Mail Service Center, Raleigh, North Carolina 27699-1605
Phone: [phone] \ FAX: [phone] \ Internet: www.enr.state.nc.us
AN EQUAL OPPORTUNITY \ AFFIRMATIVE ACTION EMPLOYER -50% RECYCLED / 10% POST CONSUMER PAPER
•
IT Corporation
200 Horizon Center Boulevard
Trenton, NJ 08691-1904
Tel. [phone]
the4figroup Fax. [phone]
A Member of 11,c IT Croup
VIA FAX 2/14 TO [phone], HARD COPY TO FOLLOW VIA MAIL
February 14, 2002
North Carolina Department of Environment and Natural Resources
Division of Purchase and Services
1605 Mail Service Center
Raleigh, NC 27699-1605
Attn: Mr. Laird A Davison, Director
Division of Purchase and Services
[phone] phone
[phone] fax
Re: Warren County PCB Landfill Detoxification Contract
NCSCO ID #010440101 OA, IT Corp Project #827062
Dear Mr. Davison,
This is in response to your letter of January 24 to our Mr. Gary Gardner asking for clarification of the IT
Group, Inc.'s, including IT Corporation's, On position on this contract in view ofour January 16 filing of
voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code.
First let me address the overall status of the bankruptcy proceedings and their impact on our efforts to sell
substantially all oflT's assets. On January 16, simultaneous with the bankruptcy filing, IT announced the
signing of a letter of intent to sell substantially all of its assets to The Shaw Group. On January 25 the two
firms signed a definitive agreement for this sale of assets, subject to· approval by the court. The Shaw
Group has also provided to date, with the approval of the court, a $55 million interim debtor-in-possession
(DIP) Joan to enable to company to continue operations.
The next court hearing is scheduled for March 7, at which time IT will seek final court approval of a DIP
loan from Shaw with an availability of as much as $75 million. Also scheduled for the March 7 hearing is a
motion to approve the bid procedures for the sale of the company.
The next court hearing is March 26, at which a sale hearing is scheduled. Six more court hearings are
presently scheduled after March 26, with the last one scheduled for June 24. It is our hope that the buyer
would be in a position to move forward on actions required to support contracts such as this one shortly
after the sale hearing, although procedural matters to finalize the sale may remain to be'completed and
approved by the court at the subsequent hearings.
Second, Jet me address issues specific to our contract with you. The most important of these is obviously
the intent of whoever purchases the company with regard to this contract. This cannot be fully confirmed
until at least the March 26 hearing to confirm the results of the sale auction. It has been speculated in
several news reports that the March 7 hearing on bidding procedures will require Shaw to file with the
court prior to the auction a list of executory contracts which they intend to assume or reject, but such a list,
if required, would obviously have no effect unless Shaw were later determined to be the successful bidder,
and would in no event be binding on other bidders.
t'
Despite the unavoidable uncertainties created by the sale process, IT has continued to perform on this
contract and intends to continue to do so as a debtor-in possession until the sale is approved by the court
and the buyer's decision to purchase and assume the executory contract is finalized. Specifically, we and
our subcontractors have continued to maintain and repair erosion control structures at the site, and are
preparing plans and submittals required for the scheduled resumption of site work in the spring. The IT
project team continues to diligently work on this project, with support by other IT personnel and
subcontractors as required. Most importantly, our subcontractor Midwest Soil Remediation, Inc. (MSR)
has, with our support, continued communications with USEPA to facilitate their review process required to
obtain the TSCA permit to perform the demonstration test in the spring. Obtaining this permit is presently
the critical path activity for the project, so avoiding any interruption to this effort should prevent or at least
minimize any delay to the project. Payments to subcontractors for all of these post-petition efforts are given
priority as administrative expenses under the bankruptcy proceedings, and so should be paid within the
terms of their subcontracts.
With regard to payments to vendors whose work has already been invoiced to the state, I must advise you
that due to the bankruptcy filing payments for pre-petition work are possibly subject to Bankruptcy Court
approval, the purchase and assumption of this contract and claims under the payment bonds. The interests
of the state are protected in this matter by the fact that we have posted 100% performance and payment
bonds for this project, as required by our contract. We have provided affected vendors with a contact at our
surety company, and at least two of them have made contact and been sent claim forms. A complete list of
all vendors with outstanding invoices for work for which IT Corp. has already been paid by the state is
included with each monthly application for payment we submit to the state as an attachment to your form
SC-323. As of Application #11, submitted on February 5, that amount totaled $176,364.46. As further
protection of the state's interest, which would only be required in the unlikely event that our surety failed to
meet its obligations, the state presently holds $200,601.41 in retainage, as of our Application # 10, which is
the last one paid by the state.
A final issue is the status of an invoice for advance payment of $300,000 to Midwest Soil Remediation
(MSR) for work not yet performed. Our subcontract with them required a total of $2,300,000 in advance
payments to them for offsite work in modification and construction of specialized treatment equipment
prior to its mobilization to the site. Of this, $2,000,000 has been paid by IT prior to filing for bakruptcy
and the balance of$300,000 remains open. Of the $2,000,000 paid, we have invoiced and been paid by the
state for $1,899,900, which has been supported by monthly progress reports on actual progress of the work.
However, MSR has advised us that they are willing to proceed to complete this work if they either receive
payment of the $300,000 or certain assurances from IT, which may require Bankruptcy Court approval.
While the resulting delay has not yet put this activity on the critical path (which continues to be obtaining
the TSCA permit from USEPA) it is a matter of some concern to both IT and the NCDENR project staff. IT
does hold a performance bond from MSR for this work, which coincidentally was issued by the same
surety company that issued the bonds you hold from IT. IT has recently been in contact with officers of
MSR and their attorney in an attempt to find a way to enable them to resume work pending payment,
possibly with support from the bonding company. These discussions appear likely to continue into next
week, and we will advise the NCDENR project manager of significant developments in this area.
In summary, let me say that we have and continue to perform on this contract to the maximum extent
permitted by the bankruptcy proceedings, and it is our hope that the purchaser will elect to accept this
contract and carry it to a successful conclusion. To this end, we have provided extensive information on the
status of the project to representatives of The Shaw Group and will of course do so for any other firm,
which may be determined by the court to be the successful purchaser.
If you have any further questions or concerns on this matter please contact me at [phone] or e-mail
me at [e-mail].
Sincerely,
IT Corp.
,/2__, ~ <2L-.
Gary~P.E.
Project Manager
Cc via e-mail, with follow-up by fax or mail if requested
Mike Kelly, NCDENR
Patricia Backus, NCDENR
Stephen Beatty, Kemper Insurance (surety)
Jim Cloonan, Earth Tech Inc.
Gary Gardner, IT Corp
David Jaeger, IT Corp
Anne Alger, IT Corp
IT Corp project file 827062
Duke file c:\mydocs\nclf\2-14-02 response to NCDENR show cause.doc
North Carolina
Department of Environment and Natural Resources
Division of Purchase and Services
&"!';}\ _11,: re, re, ,,,;,, ____ _
Michael F. Easley, Governor
William G. Ross Jr., Secretary NCDENR
Laird A Davison, Director
January 24, 2002
CERTIFIED MAIL
RETURN RECEIPT REQUESTED
Mr. Gary L. Gardner, President
Commercial Engineering and Construction Group
The IT Group, Inc .
200 Horizon Center Blvd
Trenton, NJ 08691-1904
RE: Warren County PCB Landfill Detoxification Contract
NCSCO ID #0104401010A, IT Corp Project #827062
Dear Mr. Gardner:
On January 16 the IT Group filed voluntary petitions for relief under Chapter 11 of the U.S.
Bankruptcy Code in Wilmington, Delaware, case no. 02-10118. This is a condition listed in
Article 29 of the General Conditions of our contract which could result in declaring the contract
in default.
Pursuant to Article 29, I am requesting that the IT Group provide a written response within fifteen
(15) days clarifying your company's position on this contract. Please specify how you will
complete the detoxification of the Warren County PCB Landfill according to the terms and
provisions of the contract including payment to creditors whose work has been invoiced to the
State of North Carolina.
Failure to respond within fifteen (15) days or failure to provide an acceptable response to correct
this condition will result in the State declaring the contract in default and notification of surety to
assume the work.
Sincerely,
Laird A. Davison, Director
Division of Purchase and Services
cc: Stephen Beatty, Kemper Insurance
State Construction Office
Mike Kelly, DENR
Gary Duke, The IT Group, Inc.
Jim Cloonan, Earth Tech Inc.
Patricia Backus, DENR-DWM
1605 Mail Service Center, Raleigh, North Carolina 27699-1605
Phone: [phone] \ FAX: [phone] \ Internet: www.enr.state.nc.us
AN EQUAL OPPORTUNITY\ AFFIRMATIVE ACTION EMPLOYER-50% RECYCLED I I 0% POST CONSUMER PAPER
North Carolina
Department of Environment and Natural Resources
Division of Purchase and Services
Michael F. Easley, Governor
William G. Ross Jr., Secretary
Laird A. Davison, Director
January 24, 2002
CERTIFIED MAIL
RETURN RECEIPT REQUESTED
Mr. Gary L. Gardner, President
Commercial Engineering and Construction Group
The IT Group, Inc.
200 Horizon Center Blvd
Trenton. NJ 08691-1904
RE: Warren County PCB Landfill Detoxification Contract
NCSCO ID #010440101 OA, IT Corp Project #827062
Dear Mr. Gardner:
On January 16 the IT Group filed voluntary petitions for relief under Chapter 11 of the U.S.
Bankruptcy Code in Wilmington, Delaware, case no. 02-10118. This is a condition listed in
Article 29 of the General Conditions of our contract which could result in declaring the contract
in default.
Pursuant to Article 29, I am requesting that the IT Group provide a written response within fifteen
( 15) days clarifying your company's position on this contract. Please specify how you will
complete the detoxification of the Warren County PCB Landfill according to the terms and
provisions of the contract including payment to creditors whose work has been invoiced to the
State of North Carolina.
Failure to respond within fifteen (15) days or failure to provide an acceptable response to correct
this condition will result in the State declaring the contract in default and notification of surety to
assume the work.
Sincerely,
Laird A. Davison, Director
Division of Purchase and Services
cc: Stephen Beatty, Kemper Insurance
State Construction Office
Mike Kelly, DENR
Gary Duke, The IT Group, Inc.
Jim Cloonan, Earth Tech Inc.
Patricia Backus, DENR-DWM
1605 Mail Service Center, Raleigh, North Carolina 27699-1605
Phone: [phone] \ FAX: [phone] \ Internet: www.em.state.nc.us
AN EQUAL OPPORTlJll..TJTY \AFFIRMATIVE ACTION EMPLOYER-50% RECYCLED/ 10% POST CONSUMER PAPER
North Carolina
Department of Environment and Natural Resources
Division of Purchase and Services
Michael F. Easley, Governor
William G. Ross Jr., Secretary
Laird A. Davison, Director
January 24, 2002
CERTIFIED MAIL
RETURN RECEIPT REQUESTED
Mr. Gary L. Gardner, President
Commercial Engineering and Construction Group
The IT Group, Inc.
200 Horizon Center Blvd
Trenton, NJ 0869 I -1904
RE : Warren County PCB Landfill Detoxification Contract
NCSCO ID #010440101 0A, IT Corp Project #827062
Dear Mr. Gardner:
On January 16 the IT Group filed voluntary petitions for relief under Chapter 11 of the U.S.
Bankruptcy Code in Wilmington, Delaware, case no. 02-10118. This is a condition listed in
Article 29 of the General Conditions of our contract which could result in declaring the contract
in default.
Pursuant to Article 29, I am requesting that the IT Group provide a written response within fifteen
( 15) days clarifying your company's position on this contract. Please specify how you will
complete the detoxification of the Warren County PCB Landfill according to the terms and
provisions of the contract including payment to creditors whose work has been invoiced to the
State of North Carolina.
Failure to respond within fifteen (15) days or failure to provide an acceptable response to correct
this condition wi II result in the State declaring the contract in default and notification of surety to
assume the work.
Sincerely,
Laird A. Davison, Director
Division of Purchase and Services
cc: Stephen Beatty, Kemper Insurance
State Construction Office
Mike Kelly, DENR
Gary Duke, The IT Group, Inc.
Jim Cloonan, Earth Tech Inc.
Patricia Backus, DENR-DWM
1605 Mail Service Center, Raleigh, North Carolina 27699-1605
Phone: [phone] \ FAX: [phone] \ Internet: www.em.state.nc.us
AN EQUAL OPPORTUNITY\ AFFIRMATIVE ACTION EMPLOYER -50% RECYCLED/ 10% POST CONSUMER PAPER
North Carolina
Deparbnent of Environment and Natural Resources
Division of Purchase and Services
Michael F. Easley, Governor
William G. Ross Jr., Secretary
Laird A. Davison, Director
CERTIFIED MAIL
RETURN RECEIPT REQUESTED
Mr. Gary L. Gardner, President
January 24, 2002
Commercial Engineering and Construction Group
The IT Group, Inc.
200 Horizon Center Blvd
Trenton, NJ 08691-1904
RE: Warren County PCB Landfill Detoxification Contract
NCSCO ID #0104401010A, IT Corp Project #827062
Dear Mr. Gardner:
AP.K,A -·~ a ,,,;,, , ___ _
NCDENR
On January 16 the IT Group filed voluntary petitions for relief under Chapter 11 of the U.S.
Bankruptcy Code in Wilmington, Delaware, case no. 02-10118. This is a condition listed in
Article 29 of the General Conditions of our contract which could result in declaring the contract
in default.
Pursuant to Article 29, I am requesting that the IT Group provide a written response within fifteen
(15) days clarifying your company's position on this contract. Please specify how you will
complete the detoxification of the Warren County PCB Landfill according to the terms and
provisions of the contract including payment to creditors whose work has been invoiced to the
State of North Carolina.
Failure to respond within fifteen (15) days or failure to provide an acceptable response to correct
this condition will result in the State declaring the contract in default and notification of surety to
assume the work.
Sincerely,
Laird A. Davison, Director
Division of Purchase and Services
cc: Stephen Beatty, Kemper Insurance
State Construction Office
Mike Kelly, DENR
Gary Duke, The IT Group, Inc.
Jim Cloonan, Earth Tech Inc.
Patricia Backus, DENR-DWM
1605 Mail Service Center, Raleigh, North Carolina 27699-1605
Phone: [phone] \ FAX: [phone] \ Internet: www.enr.state.nc.us
AN EQUAL OPPORTUNITY \ AFFIRMATIVE ACTION EMPLOYER-50% RECYCLED / 10% POST CONSillv1ER PAPER
-5 r-: '. '?'. 7-:.: North Carolina
. P~p~rtment of Administration
Michael F. Easley, Governor
Gwynn T. Swinson, Secretary
Mr. Laird A. Davison
January 30, 2001
Director, DENR-General Ser vices
DENR-Division of Waste Management
Raleigh, NC
Re: DENR-Division of Waste Management
Warren County PCB Landfill Detoxification
ID#0l0440101A Code:49716/49816/49916
Funds Available:
Funds Authorized:
Dear Mr. Davison:
'$8,570,274
$8,570,274
State Construction Office
Speros J. Fleggas, P.E., Director
Item:4332/4845/4725
The State Construction Office approves the award of a single
Design/Build/Treat construction contract for the above referenced
project as indicated below:
General Contract
The IT Group
Alpharetta, GA
Base Bid(Phase I)
Total Construction Contract
Technical Advisor Fee
Project Oversight Fee
Total Constructio~ Cost
Construction Contingency
Total Construction Cost
DENR Oversight & LF Maintenance
Reserve Funds
Total Project Authorization
$6,658,000
truly yours,
Mailing Address:
1307 Mail Service Center
Raleigh, N.C. 27699-1307
Telephone [phone]
Fax [phone]
State Courier #56-02--0 I
An Equal Opportunity/Affirmative Action Employer
$6,658,000
$199,100
88 1,133
$7,738,233
332,900
$8,071,133
225,530
273,611
$8,570,274
Location:
30 I N. Wilmington St., Ste. 450
Raleigh, North Carolina 27601
Mr. Laird A. Davison
January 30, 2001
Page 2
SJF/sdp
cc: Maurice King
Greg Piner
Bennett Allen
Cam Brawley
Dewey Sanders
Jim Carpenter
Zack Abegunrin
Charles H. Gardner
Patricia Backus
Jim Cloonan, Earth Tech