Trade associations of subcontractors and bonding companies are taking Ohio State University to court for not requiring the construction manager of the $1 billion OSU Medical Center Tower to provide a bond guaranteeing payment for labor and materials.

The American Subcontractors Association (ASA), its Ohio affiliate, and the Surety & Fidelity Association of America (SFAA) asked the Ohio Supreme Court to order OSU to require Turner Construction Co., its construction manager for the ProjectONE contract, to furnish a bond.

OSU said in response Thursday that it intends to vigorously defend its interests in the lawsuit.

The project is the largest of three in a pilot program the General Assembly authorized to test alternative methods of managing public construction in the state.

Gov. Ted Strickland and OSU President Gordon Gee broke ground last June for the project that is expected to result in creation of 10,000 full-time jobs. At the same time, university trustees released $925 million for design, construction, and construction management contracts.

The trade associations told the court in an initial filing that state law governing construction of public improvements requires, among other things, that the contracting agency obtain a bond for performance of the work and payment of laborers, suppliers, and subcontractors.

They contend that while OSU’s contract with Turner complies with parts of the law for use of domestic steel and prevailing wage, it fails to require Turner also furnish a bond to guaranty performance and payment of laborers, materialmen, and subcontractors.

The associations said they met with OSU officials in an unsuccessful effort to resolve the matter without a need for litigation.

“Given the size of ProjectONE, the number of first and lower tier laborers, subcontractors, and suppliers it is likely to involve, and the number of years over which construction is already scheduled to occur, the absence of the vital protection and security that the bond would provide places at risk the financial stability of hundreds of thousands of Ohio workers and the viability of thousands of small business employers in dozens of communities throughout the state of Ohio,” attorney John Petro of Columbus said in the complaint.

He requested the court hear oral arguments in the matter.

The OSU Medical Center said Thursday that in its view, the state’s Construction Reform Law (HB 318 ) does not require that Turner furnish a performance and payment bond.

“Ohio State University has secured Turner’s performance by requiring a letter of credit, which is consistent with the national trend of moving away from requiring bonds on exceptionally large projects, such as this expansion,” said David Crawford, senior director-media relations.

“As prescribed in Ohio law, the ‘mechanics lien’ provision applies to this project and provides protections for subcontractors and suppliers to ensure they are paid for their services,” he said.

“Ohio State and Turner have numerous contractual mechanisms in place to protect the interests of subcontractors and suppliers. In addition, the contract requires that Turner supply insurance covering subcontractor defaults to increase opportunities for minority-owned firms and other small businesses who might not otherwise be able to obtain bonds for their work,” Mr. Crawford said.

ProjectONE includes construction of a central, single tower that will house a new Arthur G. James Cancer Hospital and Richard J. Solove Research Institute, along with a new critical care building, integrated spaces for research, education and patient care, and upgrades to existing facilities.

OSU has said 6,000 of the full-time jobs created over the course of the project would be at the medical center. At least 4,000 indirect, full-time jobs would be generated throughout the region from spending by the university, its faculty, staff and visitors.

By 2015, ProjectONE is forecast to pump $4.1 billion annually into the Ohio economy.