By Shanderia K. Posey
Editor
Attorney Robert Gibbs is representing MAC and Associates, LLC, a division of MAC Construction Company of Mississippi, in a $37 million lawsuit against Siemens Industry, Inc. filed Tuesday in Hinds County. MAC is seeking $12 million in compensatory damages and $25 million in punitive damages.
Gibbs and Marcus Wallace, president of MAC and Associates, announced the lawsuit in front of Jackson City Hall Tuesday afternoon.
The lawsuit accuses Siemens Industry of fraudulent misrepresentation, breach of contract, gross negligence and interference with business relations.
The lawsuit states that in January of 2013 the city of Jackson entered into an Equal Business Opportunity Plan contract with Siemens to make improvements to Jackson’s water and sewer system. The improvements would cost the city about $90 million.
The EBO contract with the city called for 58 percent of the construction on the project to go to an African-American company and 32 percent go to a female company. Siemens chose MAC – a minority firm – to perform construction, sewer repair work and meter installation for $20,328,920.
“It is our allegations that when Siemens came to the city of Jackson, they made certain promises to the city as well as certain promises to MAC and Associates,” Gibbs said.
Part of those promises, according to Gibbs, was that MAC would build all of the construction for Siemens’ projects. However, Gibbs said that when the project started, Siemens removed some of the construction from MAC and gave part of the construction deal to Pedal Valve – a general contractor company out of Louisiana – which Siemens introduced to MAC. By doing so, Gibbs alleges that Siemens reduced the percentage of work to minority vendors.
MAC claims about 130 workers were affected when stoppages of the work took place and when Pedal Valve was given construction work.
“Because of problems Siemens had with the city of Jackson, there were multiple work stoppages. Each of those work stoppages caused MAC and Associates to continue to pay workers … yet Siemens did not pay MAC and they still owe MAC to this day,” Gibbs said.
The lawsuit also states that prior to the city of Jackson accepting Siemens’ proposal, Siemens committed to mentor, train and manage local minority businesses involved in the project.
“The purpose of the contract was for MAC to learn how to be a contractor so the next time a project like this came about MAC could do it on its on,” said Gibbs. The plaintiff is accusing Siemens of not honoring that commitment.
“From a businessman’s standpoint this is a real bad economic impact for my company,” Wallace said. “The thing that’s disheartening is that Siemens stood before the administration, the city council and all the folks in the community and they assured that they would mentor, train, manage and help (us) get through this project. The goal is … to complete a project like this; to come out with the skills so guys can continue to work. Well, when the city turned their backs, all that changed. The training that the guys were supposed to learn, didn’t happen.”
“Siemens did make payments to MAC, but Siemens did not fulfill its contract,” Gibbs said.
In a statement emailed to The Mississippi Link, a Siemens spokesperson said, “Siemens has consistently worked in good faith with the City of Jackson and all of its partners and subcontractors involved in the City’s Water Infrastructure Improvement project. Siemens understands the value of the City’s Equal Business Opportunity Plan and takes MAC’s allegations seriously. Siemens looks forward to continuing to work with the City and all involved parties to bring the project to successful completion.
“Siemens entered into a $20.3 million contract with MAC to provide labor, materials, design, supervision, coordination and support for the project. The scope of MAC’s work was later changed to $19.3 million based on changes in the overall City project. To date, Siemens has paid MAC nearly $17.8 million – or approximately 92 percent of MAC’s updated contract amount – for the completed portion of MAC’s work. While we do not comment on pending litigation, we can say that the company will address all inaccuracies in the lawsuit at the appropriate time.”
The lawsuit came after more than a month of failed talks between MAC and Siemens, according to Gibbs. Siemens has 30 days to respond to the lawsuit. Unless Siemens and MAC and Associates settle out of court, Gibbs said it could be a year-and-a-half before there’s a trial date.
Shanderia K. Posey can be reached at sposey@mississippilink.com.
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