US disaster agency rejects $306M for California dam repair

Not privy to Kiewit’s books. My understanding is that they have gotten partial payment, but that quite a lot is outstanding.

Spent many years where I was privy to the contract details and accounts of a company in the same markets. Here is what I will tell you about that type of company and that type of contract.

The Surety Bonding Companies don't issue Performance and Payment Bonds for the contract to get underway if the funds are not available to adequately pay for the construction. This is true for the State of California, The Corps of Engineers or the DOD as well as giant private Corporations. No single Surety has the Treasury Limits to bond a Billion for 700MM by itself so there are two Surety Bonding Companies probably writing it or they broke the Contract into separate Contracts.

If the main phase of the demo and repair of spillways was 700 MM in GC cost and lasted 16 months, then the cash flow to suppliers, the General and Subs was an average of $43,750,000 per month. Companies this size can get upside down in cash flow that is beyond 60 days by 2 to 5 million on a project like this but no more than that usually. Interim construction financing is provided by the Owner, not by the General Contractor or JV Contractors. If the project gets further behind than that it comes to a halt. Kiewit and their JV did that on the idiotic VA Hospital in Aurora when the government let it get out of control. As I recall the project got into cost overruns of 150 million and came to a halt until it was sorted out.

Likewise Kiewit had to bid STRATCOM new mission center over nine times before it got pared to a size to be done in stages as it ran over 500 MM. It got underway but then totally stopped due to changes requiring cost over runs where money is not available.

Much smaller projects may have 10% Retention to each progress payment withheld for the GC, but on projects of this magnitude it is generally reduced to 5%. Subcontractors get a corresponding amount withheld by the General but with the amount of self-performance on this project, they amounted to less than 50% of the cost in my opinion. Therefore Kiewit ends up with a carry cost of 5 to 10% of that 45 MM a month or about 5 to 10 million carry if the job gets upside down. This was not a PPP project where Kiewit financed the construction.

As this winds to the final stages, change orders and disputed amounts my end up in the 50 to 100 million category and the contractors may end up hold that all split up between Prime contractors, subs and to a lesser extent some large suppliers. In my opinion there is no possibility that Kiewit let itself get on the hook for 300 to 400 MM from the State of California.

Thanks... We lived in N. California for years before moving to S. California and my husband was a pilot. He is not well but I had him watch the video thinking he might recognize the airport but there weren’t any signs displayed at all and very little in the way of commercial businesses. He has flown into most every small airport in all directions surrounding Sacramento. The pilot was looking at the coastal range on the horizon so it was a bit of a clue but not much. We’ve flown into Placerville and Auburn but I don’t think you could see the coastal range from there. He had to be higher....

That was a heck of a long runway for a little podunk airport. It didn’t appear that it was where he had his hangar as he was leaving after he refilled his tanks.
Maybe some snooping online will reveal his whereabouts..

Thanks.

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