Stiffed Utahn seeks Senate help

WASHINGTON — Hildale resident Ron Steed asked the Senate Energy and Natural Resources Committee late last week to consider paying his company and other southern Utah businesses for work they completed on the Grand Canyon four years ago.

Steed, of R&W Excavating, is waiting for about $330,000 for the work the company completed based on an agreement with California-based Pacific General Inc., known as PGI.

The government had a contract with PGI to do several projects on the rim of Grand Canyon National Park, and it in turn hired several other companies, or subcontractors, to help complete the work, which is not an uncommon practice in working on federal projects.

But Steed told the committee that PGI was slow to make the initial payments and then it stopped all together. About $1.4 million in total is still owed to companies that worked with PGI on various programs on the park.

Under a federal law known as the Miller Act, main contractors have to post payment and performance bonds when a contract exceeds $100,000 for the "construction, alteration or repair of any building or public work of the United States."

Steed asked how PGI was able "to obtain so much work with (the National Park Service) without providing bonds?"

If PGI had a bond, the subcontractors could have made a claim against the bond, but as Steed emphasized several times, they now have no recourse to get their money, which is why he wants to see a pending bill go through.

Rep. Rick Renzi, R-Ariz., introduced a bill in February that would require the National Park Service to pay the subcontractors for the work they completed. The bill passed the House in April and now just needs to be approved by the Senate.

Sen. Orrin Hatch, R-Utah, along with Arizona Republicans Sen. Jon Kyl and Sen. Jon McCain, wrote to Committee Chairman Jeff Bingaman, D-N.M., and top Republican Pete Domenici, also of New Mexico, in July to encourage that Renzi's bill have a hearing in the Senate.

"We believe HR 1191 provides the means the NPS needs to correct the breach of trust that forced the subcontractors and their families into dire financial straits when it allowed PGI to contract work without bonds," according to Steed's testimony.

But Katherine Stevenson, acting assistant director for business services at the National Park Service, told the committee that Interior Department opposes the bill.

"The NPS does not have a contractual relationship with the subcontractors and NPS does not have the legal authority to pay subcontractors who completed work under PGI's ... contract for which PGI failed to render payment."

Stevenson noted that PGI has been indicted by the U.S. District Attorney's Office in Arizona on 26 counts of fraud.

"PGI has had every reasonable opportunity to resolve the situation but has since ceased doing business," she said.

She said the government realizes that the bill is meant to help resolve a "difficult situation" but "would effectively have NPS pay for the same services twice."

Stevenson said the government is "sympathetic" to the subcontractor but is concerned about the precedent that the bill, if passed, would set.

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E-mail: suzanne@desnews.com