The American Samoa Government is moving to terminate the contract with Whitehorn Construction, given that as of last Friday, they have not submitted a new bond, says Steven Watson, the Governor’s Legal Counsel, in response to Samoa News queries.

In late May ASG officials claimed Whitehorn’s initial bond certificates were fake or bogus, while Governor Lolo M. Moliga in a statement released to the media said the bond certificates were forged documents.  

The issue of the bonds came to light when an official with Chubb Group of Insurance Companies contacted the local DPW and AG’s offices, informing them that the agent or broker though which Whitehorn Construction Company posted their bond — in the amount of more than $399,000 — does not work for Chubb, according to a government source who wished to remain anonymous.

As a result, the government gave Whitehorn 46 business days all together — after several extensions — to come up with a new bond. However, to date, they have failed to provide a new bond.

Watson told Samoa News that they are currently conferring with the Federal Highways division to ensure their concurrence with ASG’s recommendation to terminate. As reported earlier by Samoa News, Watson noted, "in the event the default is not cured, the contract will be terminated.”

At the time, Watson further noted that some amount of work has clearly been performed, and multiple progress payments have already been made. “After termination, should that occur, the parties will then negotiate a final settlement, he said, adding “the outcome of the negotiation will determine what amounts of money may be owed by either party to the other. After termination the government will be free to either negotiate with the next lowest bidder, or to re-bid the project in its entirety.”

Efforts to obtain comments from Whitehorn were unsuccessful as of press time.

 BACKGROUND

 At the time when this matter first surfaced, Crystal Whitehorn, wife of company president and owner, Loran Whitehorn, responded to Samoa News by showing the reporter the Certificate of Bond and wire transfer documents and receipts. However, she declined at the time to provide Samoa News with copies of these documents, and Samoa News was unable to independently verify the validity of the bond.  

“We will do everything we can to make this work, even if it means forking up a new bond, we will do it… at the same time, we will pursue legal action in the mainland against this broker,” Crystal told Samoa News at the time. 

The Airport Road Project has been a highly debated topic with lawmakers and the public criticizing the progress, or lack thereof, for some time.  

The multi-million-dollar project was awarded to Whitehorn Construction in August 2012, at $7.99 million, which was $4 million less than the only other bidder, McConnell Dowell. Government engineers estimated that the work was going to cost $11.84 million. 

SIDEBAR

A side bar to the possible termination of the Whitehorn contract is the land use permit application to build and operate an asphalt plant in Tafuna submitted by Papali’i Lauli’i Alofa and Paramount Builders to the Project Notification and Review System (PNRS) Board, which held a hearing on it last week Thursday. According to the official of the company during the hearing, the plant is to supply asphalt for the ongoing Airport Road Project.

Currently, there are two other asphalts plants in American Samoa; one owned by the government and the other by McConnell Dowell — Whitehorn’s only competitor during the bid process for the road project.

Objections by the public about the application was its effect on the health and welfare of the people due to its proximity to four schools, the Veterans Stadium and other residential areas.

The question was asked, “Why do we need another asphalt plant?” The proposed site of the plant would be where McConnell Dowell had its asphalt plant before, but because of health concerns and a decision from the AS-EPA, the plant was relocated to where it is today — farther away, near the airport runway, and closer to the ocean.

Samoa News reported on the PNRS meeting in Monday’s, July 22nd issue.