Title
Request to Approve the Settlement of Claims regarding SW-548
Body
Agenda of: July 24, 2019
Item No.: 2019-292
Amount: N/A
TO: The Honorable
Board of Directors
Great Lakes Water Authority
FROM: Sue F. McCormick
Chief Executive Officer
Great Lakes Water Authority
DATE: July 19, 2019
RE: Request to Approve the Settlement of Claims regarding SW-548
MOTION
Upon recommendation and opinion of Randal M. Brown, General Counsel, the Board of Directors of the Great Lakes Water Authority (GLWA):
1) Authorize Sue F. McCormick, Chief Executive Officer, and the General Counsel to settle claims associated with Contract SW-548.
JUSTIFICATION
On or about April 12, 2010, Colasanti Construction Services, Inc. (“Colasanti”) and the City of Detroit Water and Sewerage Department (“DWSD”) entered into Contract SW-548 (the “Contract”) for the construction of certain improvements at DWSD’s Southwest Water Treatment Plant (the “Project”). The Great Lakes Water Authority (“GLWA”) is the successor-in-interest to DWSD’s rights and obligations under the Contract. The Project improvements included supply and installation, in each of four sedimentation basins, of certain components (“Collector Components”) for construction of chain and flight sludge collector mechanisms (the “Collector Mechanisms”). Colasanti contracted with J.F. Cavanaugh Company (“Cavanaugh”) via purchase order and subcontract, respectively, for the supply and installation of the Collector Components. Cavanaugh contracted with Siemens Water Technologies Corp. n/k/a Evoqua Water Technologies LLC (“EWT”) via purchase order for the supply of the Collector Components. On April 6, 2013, DWSD issued its Certificate of Substantial Completion for the Project. Both prior to and after the Substantial Completion Certificate was issued, DWSD/GLWA reported inoperability of certain Collector Mechanisms and damage to certain Collector Components. Disputes and differences arose among the Parties relating to the Project including, but not limited to, the cause(s) of and responsibility for inoperability of certain Collector Mechanisms and/or damage to certain Collector Components, and payments due under the Contract. GLWA terminated the Contract and made a claim against the Performance Bond issued by Liberty Mutual Insurance Company (“Liberty”) with respect to the Contract. Colasanti contested the default termination as wrongful and requested that the GLWA withdraw the default termination. After negotiation and facilitation, the Parties desire to resolve, contingently, their disputes and differences on the terms stated in the proposed Settlement Agreement, which is attached.
BUDGET IMPACT
The budget impact of this Agreement does not adversely impact the GLWA’s ability to perform its current and proposed financial plan. Further, once the upgrades are completed, GLWA will be less reliant on the use of a sludge removal contract.
COMMITTEE REVIEW
The Legal Committee reviewed details of the claim settlement at its meeting on June 26, 2019. The Legal Committee unanimously recommended that the GLWA Board adopt the resolution as presented.
SHARED SERVICES IMPACT
There is no impact the Shared Services Agreement.