Milpitas approves construction firm for new fire station, rejects negative allegations against company

The Milpitas City Council awarded the rights Tuesday to build Milpitas’s next fire station to a construction firm whose work safety, budgeting, and construction records have come under question by a past client and local unions.

Sausal Corporation, a Concord-based construction firm, won the $7.6 million bid in a 3-1 council vote. Councilman Anthony Phan was the lone opposing vote, while Councilwoman Karina Dominguez abstained. 

Both Phan and Dominguez questioned the company’s work safety record, past construction delays, history of litigation, and practice of using a third party for the building’s roof — along with the decision of city officials to move forward with the project.

“Time equals money, but life is not worth more than any amount of money. That includes the lives of not only the construction crew that is building our fire station. That also includes the lives of our firefighters in case something goes wrong,” Dominguez said of Sausal and the project. “Just because we check off the checkboxes doesn’t mean that it’s the right thing to do.”

The station will replace the recently-razed Fire Station No. 2 on Yosemite Road and Park Victoria Drive. 

Sausal has overseen construction of several public buildings in the Bay Area, including San Jose Fire Department Station No. 21, the West Valley College Facilities Building in Saratoga, and the San Ramon Library.

The company has been involved in at least one lawsuit, in 2015, involving a construction project in Novato where city officials alleged Sausal failed to timely complete a two-story building and parking garage, along with causing property damage due to defective work. While the city of Novato was dismissed as a party in the case, the Marin County Superior Court found that Sausal was liable and ruled against the company for approximately $1.3 million in January. Sausal has appealed the decision, which is still pending according to the court.

The case is one of several allegations mentioned on a website purported to be run by workers representing Carpenters Local Union 217; other allegations include skirting OSHA requirements and allowing unfair worker practices.

In September, San Jose-based Carpenters Local Union 405 sent a letter to the city council questioning Sausal’s qualifications to head the project, citing an unusually low project bid, which could have violated California’s Labor Code and the state’s public works wage requirements. The letter also claimed Sausal had a lengthy history of litigation, project delays at school construction sites costing thousands of dollars, OSHA violations, and at least one instance of improperly vetting a subcontractor.

In one case, representatives of West Valley Mission Community College in Saratoga blamed Sausal for water intrusion issues due to “inconsistent and missing” mortar at the project site. The college withheld funds, alleging $102,000 in incomplete and defective work from Sausal in February, 2019.

“Sausal Corporation may lack fitness and capacity to satisfactorily perform the contract at issue, based on a failure to adequately screen its subcontractor and documented performance history,” read the letter.

The Milpitas city attorney’s office and Milpitas city staff later reviewed the letter and determined the content raised in it was “minor and inconsequential” and would not affect the fire station project. It also found that after surveying 12 past projects constructed by Sausal across the state, only West Valley College provided negative feedback. The other 11 project owners said Sausal provided enough personnel and equipment to complete their projects before their deadlines, and “would be happy to hire Sausal again.”

“Staff is comfortable that Sausal Corporation will be able to complete the required roofing work, and there are sufficient safeguards in place to protect the city and provide a quality product for the new fire station,” read a city presentation.

On Tuesday, Sausal Vice President Dan Wood told the council that all work, including a roofing subcontractor, would be inspected by a third-party waterproofing consultant to ensure there are no issues with the project.

Representatives from Sausal were not immediately available for comment.

The new Milpitas fire station will span 10,300 square feet at the site of the former fire station. It will include three fire equipment bays, dorm rooms, a kitchen, and a public meeting room, according to a city presentation. Construction is set to begin next month and will be completed by spring 2022. The project, along with associated construction costs, will total an estimated $9.5 million.

“This is really about safety. It’s always safety first,” said Mayor Rich Tran, in the course of casting one of the three votes to support the Sausal-led project. “Second is being on time. And I really want to be on time with this fire station.”