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University “within its rights” in terminating contract with architecture firm

November 29, 2009

milgrom.2@osu.edu

An Ohio State spokesman said Monday that the university was well within its rights to terminate a contract with an architectural firm working on the university’s $405 million expansion of the medical center.

However, an attorney for Karlsberger Architecture took issue with much of what the spokesman said.

“Ohio State’s agreement with Karlsberger Architecture provided the right to terminate the contract without cause at anytime and we simply exercised that option — based solely upon businesses reasons. The university has fully paid the company for all the work performed,” said Jim Lynch, director of media relations, in an e-mail released Monday. “We understand that the company is upset with our decision, but the university felt that it needed to have the best team in place for a project of this magnitude. That selection process is currently underway.”

The firm filed a lawsuit against OSU on Nov. 13, alleging that OSU and its board of trustees violated the state’s open meetings laws.

The lawsuit alleges that members of the board held secret sessions leading to the termination of the $32 million contract. OSU did not offer a cause for the termination.

“The allegation that OSU violated Ohio’s open meetings laws does not have any merit,” Lynch said in an interview. “The committee they refer to was an advisory board that is not subject to these laws.”

He also said the process of hiring an architect does not require approval from the trustees, nor does the process of firing one.
Cary Purcell, president of Purcell Law Offices LLP, spoke on behalf of Karlsberger.

“The statement claims the contract was terminated for business reasons, but OSU refuses to tell us what those reasons are,” Purcell said.

Purcell says the termination of the contract without cause was unlawful because OSU failed to act in good faith. He went on to say that the “no cause” provision was not enforceable because OSU did not indicate there had been a “cardinal change” since the contract was signed. A cardinal change is a radical change that alters the nature of a contract.

Purcell also took issue with Lynch’s statement that OSU has paid Karlsberger for its services.

“We have sent OSU two invoices that total more than $1.2 million and have received just over half that,” he said. “The company is of the position that it is far from being fully paid.”

Purcell was also confused by OSU’s statement that it is trying to get the best team in place for the project.

“We were selected in the first place because OSU determined we were the best team,” he said.

Purcell also noted that it was the other firm working on the project, Hellmuth, Obata and Kassabaum, Inc., that had submitted three designs that were ultimately rejected.

“The qualifications in 2008 for hiring a firm identified Karlsberger as the best architect for the project,” Purcell said. “We haven’t changed since then.” 


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