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PUC pledges contracting reforms after Mitchell Engineering raises payment and delay complaints
Summary
Mitchell Engineering told the San Francisco Public Utilities Commission on Oct. 10 that multiple public-works projects are behind schedule, payments are being withheld and contractors face threatened liquidated damages; staff presented a 13-point plan to speed decisions, centralize invoicing and reduce claims.
Mitchell Engineering told the San Francisco Public Utilities Commission on Oct. 10 that slow responses, withheld payments and disputed change orders have left multiple city projects protracted and contractors reluctant to do work in San Francisco.
"We have $1,500,000 being withheld on the job," Jason DiIulio, a project engineer with Mitchell Engineering, said of the central pump station project, which he said is 292 calendar days behind schedule. Company representatives said the city had rescinded previously agreed delay days, denied additional crews and later threatened to impose liquidated damages as projects neared completion.
Mitchell's president, Mike Silva, told commissioners the firm has filed a government claim on an unresolved job and warned that many contractors have left San Francisco. "San Francisco needs all its contractors that it can get," Silva said, urging the commission to restore confidence in the contracting environment ahead of large statewide bond-funded work.
Commissioners and staff acknowledged the contractors' complaints but cautioned against using the public comment period to litigate active disputes. The commission asked staff to separate project-level, legally contested claims from system-level contracting defects that the commission can fix.
Harlan Kelly, assistant general manager for infrastructure, presented a 13-point package of recommendations developed with the city attorney's office and a task force of contractors and department staff. Key proposals the PUC staff highlighted include: appointing a dedicated city attorney for major PUC projects; forming a claim-avoidance group; establishing dispute review boards in new contracts; centralizing invoice intake and tracking; issuing contractor prequalification documents; exploring alternative delivery methods (design–build, job order contracting, construction manager at risk); and strengthening quality-review and bonding practices.
"We want to reduce delays, eliminate scope creep and improve relations with the contracting community," Kelly told the commission, summarizing the staff plan and noting that several items could be implemented without waiting for broader administrative-code changes.
Commissioners pressed staff on implementation details: some reforms (prequalification, centralized invoicing and improved turnaround times for RFIs and change orders) were described as immediately actionable, while others would require coordination with the city attorney and, in some cases, board of supervisors action. Tony Irons, deputy general manager, said the PUC will seek budget authority for staffing and move toward electronic invoicing to speed payments and improve tracking.
Mitchell representatives and other contractors welcomed the proposals and urged staff to apply lessons to legacy projects where feasible. The commission asked staff to prepare a written summary of specific project issues for the commissioners' information and to return with measurable objectives and timelines for the recommended reforms.
Next steps: staff agreed to provide a report to the commission on the specific contracting issues raised, to work with the city attorney on code and policy changes where needed, and to return to the commission with implementation details and periodic updates.
