TRANSMITTAL LETTER FOR BOARD MEETING OF APRIL 7, 2016
COMMITTEE ON PROCUREMENT
Mr. David St. Pierre, Executive Director
Title
Authorization to enter into a settlement agreement for Contract 06-154-3S Summit Conduit Rehabilitation, with Sekisui SPR Americas, LLC, Account 401-50000-645700, Purchase Order 5001391
Body
Dear Sir:
On June 16, 2011, the District awarded Contract 06-154-3S Summit Conduit Rehabilitation, SSA to DiPaolo Company in an amount not to exceed $1,943,477.00. Westchester Fire Insurance Company (Westchester) provided the performance and payment bonds for DiPaolo Company on the contract. DiPaolo Company failed to perform any work on the contract and tendered a voluntary default on the contract to the District on July 18, 2012.
The District made demand upon Westchester to intervene and fulfill its surety obligations, including providing a new contractor to complete the contract work. Westchester submitted a proposed Tender/Assumption and Assignment Agreement under which Sekisui SPR Americas, LLC (Sekisui) would act as a completion contractor, and Sekisui agreed to complete the contract work in accordance with the original contract terms and conditions.
Several months ago, Sekisui and the District began discussions to mutually terminate this project due to difficulties that have arisen during the course of the work. The District and Sekisui have been unable to reach an agreement on the best way to complete the contract work and, after over a year of effort to move forward on this project, it has been decided that a mutual termination and settlement agreement is in the District’s best interest. The contract work is approximately 52% complete, and upon closure of the contract, the balance of the contract funds (approximately $929,990.00) will be returned to the Bond Fund. The uncompleted work does not pose a risk to the public and a future contract may be advertised to complete the remaining project.
An agreement has been reached to mutually terminate this project with no fault being attributed to either party. Sekisui will be refunding $260,779.62 to the District, which represents the value of unused materials delivered to the work site, and paid for, that are no longer required.
Additionally, the General Counsel requests authority to execute such documents as may be necessary to effectuate this settlement and mutual termination of Contract 06-154-3S.
Requested, Catherine A. O’Connor, Director of Engineering
Recommended, Darlene A. LoCascio, Director of Procurement and Materials Management
Respectfully Submitted, Barbara J. McGowan, Chairman Committee on Procurement
Disposition of this agenda item will be documented in the official Regular Board Meeting Minutes of the Board of Commissioners for April 7, 2016