Contractor for Salem fiber optic project fired in midst of legal dispute
Jun. 13—SALEM — SiFi Networks, the company that is under a 30-year contract with the city of Salem allowing it to install a high-speed fiber optic network here, has fired the construction firm it brought in to do the work.
The development comes amid an ongoing legal dispute between SiFi Networks Salem and Mears Group, a Texas-based multinational construction firm over the projected cost of the project.
And it further clouds the timeline for the project, already several years behind schedule.
Last Tuesday, Mears Group added a new claim of wrongful termination against SiFi to its lawsuit, after it was notified on May 25 that SiFi was ending its contract.
A SiFi spokeswoman, in response to an email from The Salem News, acknowledged on Thursday that Mears has been terminated and said SiFi is seeking replacement contractors.
"SiFi Networks continues to work diligently with the city to establish requirements and new timelines for the completion of the project," the spokeswoman said via email.
She did not respond to follow up questions concerning whether those requirements would be on the part of SiFi, the new contractor, or the city, or what those might entail. She also did not answer a question as to whether SiFi is continuing to work with Mears Group in other communities.
Victoria Caldwell, the assistant city solicitor, said the city hasn't received any recent update as to how the termination of Mears Group will affect the project.
"We're hoping to hear more from them soon and will be able to fill you in then," Caldwell said via email.
SiFi Networks first approached the city about installing a fiber optic network back in 2017. The city then put out a request for proposals and in 2018, entered a contract with the firm allowing it exclusive rights to build the network, at no cost to the city. The cost of building the network would be recouped from fees paid by local internet service providers to SiFi to access the fiber optic lines.
Work began last year in a "pilot" in the Highland Avenue area.
Then, Mears Group filed suit against SiFi last August, alleging that it was not made aware of numerous requirements, including paying for police details at work sites, installing more high-traffic rated utility vaults and obtaining environmental permits for the work, when it bid on the project. It alleged that it had not built those factors into its projected cost, but that when it attempted to get SiFi to agree to change orders in the contract, SiFi refused. It contends it is owed at least another $6 million.
SiFi subsequently filed a countersuit, saying Mears, as an experienced multinational construction firm, should have been aware of the requirements when it bid $12 million for the job.
The city has not been named as a party in the litigation, though it is referenced throughout court filings, with Mears contending that the city has "continuously inquired and/or implemented conditions relating to Mears' means and methods with a level of detail not typical in the industry."
The work that had been contracted out to Mears Group involved "microtrenching" and installing conduit for fiber optic cables throughout the city, a process that involves cutting a 2-inch wide and 18-inch deep trench past every home and business in the city, along with installing equipment vaults at various locations. Future customers would then be able to tie into that line.
In court filings, Mears said it did not expect to have to perform the level of restoration that the city wanted, including milling and resealing with materials suitable for the area's climate, or to use as many high-traffic rated vaults as requested by the city.
And while city officials had waived a requirement for permits to "open" each street, the company was still being required to follow the state's Wetlands Protection Act and to get permits from the city's Tree Commission, it said in court filings.
Mears also said it believed that the cost of any required police detail would be waived by the city.
Courts reporter Julie Manganis can be reached at 978-338-2521, by email at jmanganis@salemnews.com or on Twitter at @SNJulieManganis
Courts reporter Julie Manganis can be reached at 978-338-2521, by email at jmanganis@salemnews.com or on Twitter at @SNJulieManganis
