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File #: 2019-292    Version: 1 Name:
Type: Resolution Status: Passed
File created: 7/22/2019 In control: Board of Directors
On agenda: 7/24/2019 Final action: 7/24/2019
Title: Request to Approve the Settlement of Claims regarding SW-548
Sponsors: Randal Brown
Indexes: General Counsel
Attachments: 1. GLWA-CCE Settlement Agreement with Exhibits (02443417xBF7C9)

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.