City, Quam Construction debate penalty solution

The New England City Council met during a special meeting on Thursday, April 13 to discuss possible penalties for Quam construction for a delayed completion of Phase II of the water rehabilitation project.

PHOTO—Moore Engineering engineer Luke Arnond (LEFT) addresses the city council with Marty Opdahl (MIDDLE) and Frank Schmidt (RIGHT) listening on. (Herald Photo by Cole Benz)

By COLE BENZ | Herald Editor
cbenz@countrymedia.net

The New England City Council met during a special meeting on Thursday, April 13 to discuss possible penalties for Quam construction for a delayed completion of Phase II of the water rehabilitation project.

Quam construction had an end date for ‘substantial’ completion of Nov. 1, according to the contract, and a deadline of Nov. 15 for final completion and payment. But due mostly to weather related delays among some of their other projects, coupled with a later bid opening in New England, the company did not meet those dates, according to New England City Auditor Jason Jung.

“There was a few different reasons why that happened,” he said.

As it states in the contract, which was read aloud during the special meeting by Moore Engineering representative Luke Arnond, Quam was to be penalized $3,000 per calendar day until substantial completion was finished, then $1,000 per calendar day until the final completion.

At the December city council meeting, the council approved assessing a penalty of 30 days, from Nov. 1 to Nov. 30. And at $3,000 per day, that total came to $90,000.

“In most all contracts, because of how North Dakota winters are, a contractor is not expected to work from Dec. 15 to April 15,” Jung said. “You’re usually not able to set penalties during that period of time.”

At the meeting, Dave Quam said he was a little caught off guard, and any word of issues he said was mostly hearsay until a few weeks ago.

“So I’m kind of in the dark about this,” he said. “And up until two weeks ago I knew nothing about this.”

Though he did admit he knew the start date, and the completion dates that had been set in the contract.

But the two phases have since come in under budget—in Phase I there is $340,000 of grant money left over, and in Phase II there is between $200,000-$250,000—the conversation at the meeting centered around Quam completing more work, instead of issuing them a fine.

“How much is the city willing to give up as far as the penalty is concerned, and how much is Dave [Quam] willing to come, and meeting in the middle,” Opdahl asked. “Basically I would like to work with [Quam Construction] to see if we can get some more work done, and try to work out an equitable solution, in leu of the penalty, basically work for the penalty and forget about assessing a penalty or having a penalty assessed, and yes, have the timeframe, without a doubt.”

What they’re hoping to get done is roughly three to four extra blocks of work done, including water, sewer and pavement.

So essentially, if they agreed, Quam could do $90,000 worth of work, or $45,000 work of work and take a $45,000 fine; it could be some kind of combination like that, according to Jung, but he didn’t have specifics, that will be determined at a special meeting scheduled one hour prior to the regularly scheduled May council meeting.

After the meeting on Thursday, Dave Quam and Fetsch got together to talk about specifics on the extra work, so Quam could come back in two weeks to give the city a timeline and a cost for the added portions.

If Quam agrees to perform the extra work, a new contract would not be required, because Quam has already been awarded the Phase I and Phase II projects. The city would just have to draft a change order.

However, if he balks and decides not to do the work, then the work would be put in Phase III and would require a new contract and an open bid process. According to Jung, the money leftover from the first two phases would be transferred to the third phase.

“One hundred percent, that is right,” he said.

Though the meeting became briefly contentious between the city and Quam, it ended amicably and both stated their affinity for working together.

“Other than the project didn’t get completed,” Opdahl said during the meeting. “We’re happy with the work that’s been done.”

“We like working here,” Quam said.

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