REA Final - 22 Dec 20 - eBook - 1682 pages

Dear Scott,

Wanted to circle back regarding our discussion and correspondence from last week. Thought it would be helpful to provide additional background regarding the BOH work.

On June 12 th , I met with Frank Corallo to withdraw our proposal for the BOH change order. I came to the decision, in part, due to similar concerns you raised when we spoke. Frank asked what would alleviate my concerns, agreed to the terms I specified, and instructed me to resubmit the proposal. The revised, Spearhead Proposal included the following:

“Frank, based on our discussion, June 12, 2019, Skanska Walsh JV (SWJV) agrees to the following: • SWJV to provide a Project Schedule for each trade by Friday, June 14, 2019 • SWJV to remit payment within 30 days of Spearhead payment requisition date • SWJV to cover accelerated labor rate differentials for shift, holiday or overtime rates • SWJV to provide scaffold for access to work areas”

Scott, Spearhead currently has two contracts at LGA: Pier A, B, CHRP (680-021) and PBB (620-027). We’ve been closely monitoring cashflow at both projects and have observed the following:

1. The duration Spearhead must carry the expenses of the project are significant. 2. The duration between submission and approval varies based on project team.

PBB Draws - completed

Average days from Spearhead’s Outlay of funds to Approval date: 114 days Average days from Invoice Submission to Approval date: 28 days Average days from Approval date to Disbursement: 35 days Total time Spearhead “floats/carries” expense: 149 days

Pier A,B, CHRP Draws - completed

Average days from Spearhead’s Outlay of funds to Approval date: 36 days Average days from Invoice Submission to Approval date: 6 days Average days from Approval date to Disbursement: 34 days Total time Spearhead “floats/carries” expense: 70 days

Current payment terms were one of the reasons I told Frank we might not be the right contractor for the additional work. Frank assured me he would revise these terms to allow for accelerated payments and I agreed to resubmit our proposal reflecting our discussion.

Take care,

Andee Hidalgo

CC: Rose Ott

Spearhead Construction, LLC

1

PO BOX 575 Fort Montgomery, NY 10922