Pax River museum on hold over dispute with contractor

Firm says it unknowingly bought fraudulent construction bonds

April 05, 2013|By John Fritze, The Baltimore Sun

WASHINGTON — — Work on a $4.7 million museum at Naval Air Station Patuxent River that is mostly paid for with state and federal grants has been suspended, and a prominent construction firm was recently pulled from the project, St. Mary's County officials said Friday.

Broughton Construction, a Washington-based contracting firm with offices in Baltimore, was removed from the project after county officials learned that it had purchased fraudulent construction bonds. An attorney for Broughton said the firm purchased the bad bonds unknowingly.

The breakdown has stalled work on the project for months, frustrating museum backers who have sought for years to replace their current building. The museum features aircraft and other technology tested at the naval installation in Southern Maryland.

The project received a $3.4 million federal grant and $1.2 million in state money.

"Now we're waiting for it to happen," said Patuxent River Naval Air Museum Association board president Ed Forsman, a retired Navy test pilot. "The purpose of the museum is to show what happened here."

The 21,000-square-foot museum is being built on Route 235. It was set to open in 2014.

Broughton was awarded the contract last fall and broke ground in October. Documents obtained through a state records request show that the county issued a stop-work order Dec. 7 after it learned of the problem with the bonds.

On March 20, the county rejected Broughton's proposed solution and threatened to end its contract.

Broughton managing member Casey B. Stringer did not respond to a request for comment.

Chuck Asmar, an attorney for the company, said Broughton purchased the bonds from an approved Maryland broker and was as much the victim of the fraud as the county. The company lost more than $174,000 on the bonds, Asmar said.

He added that other construction firms have been hit with the scam.

Asmar said there are no issues with the quality of the construction work performed.

St. Mary's County Attorney George Sparling said the county had no information to indicate that Broughton was involved in wrongdoing.

But because Broughton has been unable to post a new bond that meets the county's requirements, officials are now reviewing how to get the project restarted.

St. Mary's officials must also determine how to terminate the county's contract with Broughton — a decision that will affect both the company and the county. Ending the contract "for default" would put Broughton on the hook for undetermined financial damages and could make it harder for the company to land future government work.

In a March 28 letter, Broughton attorneys urged St. Mary's to negotiate a way to close the contract, "avoiding the death sentence that a termination for default would be."

Sparling said the county has not yet determined how it will close the contract.

Broughton, which maintains an office on East Baltimore Street, has performed work for Anne Arundel County schools and Coppin State University in addition to several projects in the Washington region. The Baltimore Business Journal in 2011 ranked Broughton as the sixth-largest minority-owned firm in the Baltimore area.

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