A mistaken calculation in the design of a new state psychiatric hospital is pushing back the project’s completion date until late 2027, and will potentially leave New Hampshire taxpayers on the hook for an additional $5 million.
The error in the building’s foundation was found earlier this year, leading to a months-long work stoppage while engineers determined how to correct the problem.
A recently negotiated settlement calls for an insurance company for one of the project’s building contractors to pay the state $9.9 million to account for the foundation fix. But during Wednesday’s Executive Council meeting, officials said the delay — combined with the costs to redesign the hospital — could run closer to $15 million, or $5 million less than the insurance payment.
“What we're talking about here is probably the single biggest project failure in the last decade,” said Charlie Arlinghaus, commissioner for the New Hampshire Department of Administrative Services.
Arlinghaus and New Hampshire Attorney General John Formella defended the settlement with the insurance company as a way to keep the project moving forward, even if it didn’t cover all of the state’s liabilities.
That decision didn’t sit well with some members of the Executive Council.
Councilor Janet Stevens, a Republican, accused the project of “spiraling out of control,” an allegation officials disputed.
“It sounds like there's some unknown deficits that the taxpayers are going to be responsible for,” said Democratic Councilor Karen Liot Hill. “And I'm not comfortable with that.”
But with the settlement agreement already signed, the councilors had little choice but to approve accepting the $9.9 million from the insurer for SMRT Inc., the company that designed the flawed pilings that will ultimately support the 41,000-square-foot facility being constructed by PC Construction of Vermont.
Under the settlement, neither the state, nor SMRT Inc., nor PC Construction is admitting fault, and both firms are remaining on the job.
Gov. Kelly Ayotte told reporters Wednesday that lawmakers were recently made aware of the potential need to find an additional $5 million to cover extra costs. It isn’t clear where the money may come from.
After the months-long delay, construction will now resume in Concord, with a new completion date of Oct. 2027, more than nine-months later than initially targeted.
Ted Kupper, a state engineer, said the error was part of a complicated design structure. After installing support piers, contractors noticed a “deviation” in an initial wall.
“That got everyone looking at the calculations that were made by the consultant, and they found an error,” he told councilors.
Formella said that while the state could have gone to court to sue over the flaw, there was no guarantee a verdict would award more than what the state secured through the insurance settlement.
“Could we potentially have sued them and maybe gotten more many years from now? Like any case, yes, the answer is yes,” said Formella. “But I don't think that would have been in the state's best interest.”
Once complete, the new 24-bed hospital will replace the existing secure psychiatric unit located at the New Hampshire State Prison for Men, a facility that has been the subject of multiple lawsuits alleging inhumane treatment of residents.
The state broke ground on the new unit in August 2023. The bulk of the project is funded with federal money from the American Rescue Act.
