TRANSMITTAL LETTER FOR BOARD MEETING OF MAY 4, 2023
COMMITTEE ON JUDICIARY
Mr. Brian A. Perkovich, Executive Director
Title
Authority to settle claim of Inliner Solutions, LLC for additional time and material costs associated with Contract 06-155-3S, in the amount of $1,350,000.00, Account 401-50000-645700
Body
Dear Sir:
On December 3, 2015, the District contracted with Kenny Construction Company for the Salt Creek Intercepting Sewer 2 Rehabilitation project, SSA Contract 06-155-3S. The contract provided that Kenny would complete the project for an amount not to exceed $46,072,005.00, a total that included a five (5) percent allowance for change orders. The project was completed in 2020 with payments made to Kenny totaling $44,357,244.48 after certain change orders were approved. In 2018, as the project was nearing completion, Kenny demanded the District pay an additional $9,491,403.39 for extra costs it allegedly incurred on the project due to unforeseen site conditions. The District disputed Kenny’s claims and negotiations did not resolve the claim.
In 2020, Granite Construction Company, successor to Kenny, filed a breach of contract lawsuit against the District entitled Granite Construction Company successor by merger to Kenny Construction Company v. Metropolitan Water Reclamation District of Greater Chicago, Case No. 20L006527, in the Circuit Court of Cook County. Inliner Solutions, LLC later substituted as the plaintiff after acquiring some of Granite’s assets, including its claim against the District.
Rather than pursue the litigation initiated by its predecessors, Inliner has agreed to accept $1,350,000.00 to resolve all claims it has against the District related to the project. The extra costs on this contract, including the proposed settlement, remain within the Board’s previously approved allowance for change orders.
The General Counsel finds the proposed settlement to be reasonable and in the best interest of the District. Therefore, the General Counsel respectfully requests that the Board of Commissioners grant authority to settle Inliner Solutions, LLC’s claim in the total amount of $1,350,000.00. Additionally, the General Counsel requests authority to execute such documents as may be necessary to effectuate this settlement.
Requested, Susan T. Morakalis, General Counsel, STM:JTM:ATF:ECZ
Recommended, Brian A. Perkovich, Executive Director
Disposition of this agenda item will be documented in the official Regular Board Meeting Minutes of the Board of Commissioners for May 4, 2023