State fires Archer Western from $129 million Broughton Hospital project; calls on bond

broughton hospital project
Rendering of the Broughton Hospital project, that state officials say has been so badly delayed that they have fired the contractor from the project and asked the bonding company to complete the work

State officials have fired Archer Western Contractors of Charlotte from the project to build a state psychiatric hospital that is two years late and years away from completion, the Raleigh News & Observer reports.

The company that insured the $129 million project through a bond will now step in and manage completion of Broughton Hospital in Morganton.

State officials require contractors hired to build public projects to purchase a surety bond that can be invoked when the contractor defaults. Archer Western provided a $129 million bond through Travelers Insurance when it won the contract by low bid in 201.

The state had hired Archer Western Contractors of Charlotte five years ago to build the 400,000-sq. ft. hospital, adding another 100 beds to the psychiatric hospital serving patients in the western part of the state. Originally, the new hospital was expected to open in the fall of 2014. (Atlanta-based Archer Western is a subsidiary of Chicago-based The Walsh Group Ltd.)

Though the project has been plagued with construction problems since 2013, state officials did not rein in the contractor until recently. Mandy Cohen, Gov. Roy Cooper’s secretary of the Department of Health and Human Services, began investigating the stalled project when she came on board in January. The News & Observer reported on the problems in March.

After months of efforts to get the project back on track, the agency has given up on Archer Western, the newspaper says. DHHS leaders predicted it would have taken the company two more years to finish. Letters sent between company leaders and DHHS officials have been filled with sharp accusations about the project’s mishaps.

In a letter sent April 20, state officials formally fired the contractor, offering one more round of criticism.

“AWC has essentially put forward the same excuses that have been rejected by DHHS and the Project Architect on prior occasions, sought to demand acts by DHHS and other State Project participants to which it has no right under the Contract, and to resurrect stale (and non-meritorious) contract claims,” wrote Luke O. Hoff, director of the Division of Property and Construction for DHHS.

In February, Archer Western officials defended their work in a 999-page letter with exhibits, arguing it was in the best position to finish the hospital. Hoff dismissed the contractor’s latest revised completion plan, describing it in the April 20 letter as “illusory and unachievable.”

DHHS officials have now demanded Travelers take over the project and complete Archer Western’s contracted work. Agency officials met with insurance representatives Wednesday to start negotiating how that would happen.

DHHS officials are insisting that Archer Western have no role in that new plan.


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