Iowa Agrees to Pay Prison Contractor $7 Million
FORT MADISON, Iowa — The Iowa State Appeal Board finally agreed to pay $7 million more to the general contractor to resolve a dispute that delayed the opening of the new maximum-security prison in Fort Madison. The final $131 million cost, however — which increased due to delays, mistakes and cost overruns — may not be resolved without a court ruling.
The financial dispute started a year and a half ago after a ribbon-cutting ceremony for the new 800-bed Iowa State Penitentiary was held in October 2013. The main contractor on the project, Chicago-based Walsh Construction Co., submitted a claim for $18.2 million in December 2013 to cover additional expenses required to fix problems at the new prison. This was three years after the initial contract was awarded on the project, which was originally expected to cost $117 million.
The state fire marshal’s office wasn’t able to authorize occupancy because of a lack of compliance with the state’s building code. Issues related to the geothermal heating and cooling system, smoke evacuation system, ventilation and air leakage that led to concerns about frozen water pipes have all been questioned over the past several months. There was also an issue with a lack of insulation in the roof of Building 7.
A professional mediator ruled the state should pay about 40 percent of what Walsh Construction sought to settle all outstanding claims. David Roederer, director of the state Department of Management and a member of the State Appeal Board that voted to settle, told the Quad City Times that the settlement was “probably a fair conclusion to a bad situation. We had a lot of subcontractors who were not being paid through no fault of their own as it was being tied up in this legal dispute.”
Jeffrey Thompson, the state’s Solicitor General, was the state’s main negotiator on the legal settlement. “It was undisputed that they spent additional time on the project and it is a fair and reasonable resolution of that dispute,” he told the State Appeal Board.
Other legal disputes between the state and firms involved in the prison project, such as the architects and designers as well as the heating and ventilating contractors, are still pending.
“Some of those parties might potentially be responsible for the cost overruns or the delay,” Thompson told reporters after the meeting, “in which case we’ll see what we can do to see if we can pursue that.”
As of now, the cost of the new prison stands at about $131 million. Prison officials claim that inmates may begin occupying the facility by the end of this summer, about a year and a half after the originally scheduled move-in date. However, officials have made claims about move-in dates in the past, and the facility is still not open.