A new construction company will have to be chosen to finish building a new and permanent home for the Patuxent River Naval Air Museum.
Work on the foundation for the museum near Gate 1 of the Navy base was begun last fall, but work has been halted since December.
Broughton Construction won the $4,662,200 construction project in September to build the museum in Lexington Park. However, Broughton Construction purchased fraudulent performance and payment bonds to guarantee the work would be finished.
St. Mary’s County government issued a stop-work order on the museum project on Dec. 7 after it found the bonds were fraudulent. Broughton Construction was given 10 days’ notice last month to provide new bonds or a letter of credit or else face a declaration of termination for default, which attorneys for the firm said would seriously hurt the construction company.
“Clearly, Broughton’s role in this project is coming to an end, through no fault of its own,” a March 28 letter from the law firm of Asmar, Schor and McKenna said on behalf of Broughton Construction.
“Broughton was the victim of a serious crime,” wrote attorney Christopher Taggi.
The company paid $174,832.50 to a third-party bond broker and “it expected to receive legitimate bonds. Instead, it got fleeced. The bonds were fraudulent and Broughton lost its $174,832.50,” he wrote.
“Broughton has tried its best to obtain alternate security that’s satisfactory to you, but given the hand it has been dealt, it has not been successful. It recognizes that this means that its contract with you will be coming to an end. The only question is how it will end,” Taggi wrote in the letter to Elaine Kramer, St. Mary’s County’s chief financial officer.
The letter said a termination for default “would prevent Broughton from getting any further government work. Make no mistake: if you follow through with the termination for default threatened in your March 20th letter, you will put Broughton out of business.”
Taggi suggested a unilateral termination or a termination for convenience instead.
A termination for default would mean a “death sentence” for Broughton Construction, he said.
A unilateral termination or a termination for convenience would leave the contractor with no criminal or legal repercussions, said a source familiar with the project, whereas the termination for default would leave the company in a position obligated to St. Mary’s County government for damages.
So how will St. Mary’s County government terminate the contract? There were several other bidders for the naval air museum last fall. Will those bids be re-evaluated or will the project be rebid?
George Sparling, county government attorney, said Wednesday, “Those matters are still under consideration. Information has been requested from two other bidders.”
The naval air museum project has been in the works for more than 15 years and involves $1.5 million in private donations, $1.2 million from Maryland government and $3.4 million in federal funds.
St. Mary’s County government also matched funds along the way, and prepared the site for a new building.