Texas A&M University System sued by local construction company

COLLEGE STATION, Tex. (KBTX)- Acklam Construction is suing the Texas A&M University System for what it calls a breach of contract and failure to pay nearly half a million dollars for renovations on the Commons Building.

Top-ranking representatives at A&M tell KBTX they were shocked to learn they were being sued by the College Station-based company, considering they’ve done business with Acklem on several school projects for the past three decades.

“I was very surprised,” said Philip Ray, Vice Chancellor for Business Affairs at A&M.

“I have a lot of respect for John Acklam and his son, Sean. They're a fine company. Over the years they've done a number of smaller projects with us. They've grown and have been a good provider and I have a lot of respect for them,” said Ray.

Click here to learn more about Acklam Construction Company, Ltd.

In the lawsuit filed this summer in Brazos County, Acklam Construction claims the A&M University System has “improperly engaged in a scorched earth campaign to withhold valid payments owed.”

The remaining balance for renovations on the Commons Building is $476,234.36, according to court documents obtained by KBTX.

Ray says the squabble between the school and Acklam centers around a clause in the contract between the two that allows A&M to conduct third-party audits on all of its contractors.

Click here to view a full copy of the lawsuit.

“It's very clearly defined in the contract, in all our agreements. Take for example, Kyle Field. When we did our third party audit on that we recovered millions of dollars on the Kyle Field audit. It's just a sound business practice,” said Ray.

Acklam claims the university deviated from audit procedures utilized on the past five projects it’s worked on, and failed to notify Acklam of its intention to conduct a more extensive audit following the completion of the Commons Building renovations.

“This would have allowed Acklam to put the proper book keeping procedures in place at the outset and to timely notify its subcontractors of these requirements so they could comply,” said Acklam in its original petition to the court.

Calls to Acklam for comment on this story were not returned, but in its lawsuit, Acklam says the Commons Building was finished under budget and on-time, and it’s never had to do this kind of an audit before.

Ray says Chancellor John Sharp is running a tighter ship for the sprawling system. With more projects planned, Sharp says there’s a greater need for accountability of taxpayer dollar.

“It's something we don't take lightly, and so we don't have it in our agreements lightly,” said Ray. "As a contractor is awarded larger, more complex projects we do have an expectation that we're going to have this third party auditor. I think it makes a lot of sense for the state of Texas, I think it makes a lot of sense for the taxpayer as well as the A&M system. We have to be accountable.”

In addition to the breach of contract claims, Acklam also accused the Texas A&M University System of violating business ethics by attempting to distribute construction materials to a school employee “under the table.”

Acklam also accuses Russ Wallace, Executive Director of the Office of Facilities Planning & Construction, of discrimination and favoritism after TAMU awarded at least three contracts to Acklam's competitors, despite submitting the lowest fee proposal.

Rays says Texas A&M has investigated each of those allegations, and found them "totally unfounded" following a thorough review.

The Texas A&M University System says if Acklam agrees to the audit, it’ll continue doing business with the company in the future.

"This is business. This is not personal," said Ray.

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