09.02 Maintenance Facility Project - Potential Closeout of Contract

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Nancy Malecha sent the attached email to BCI on May 12, 2020. Brian Bankers, BCI's project manager, sent back the attached May 22, 2020 email which Nancy responded to indicating it would come before the Council. In our opinion, even though Mr. Bankers has made comments on several issues in his May 22nd email, the crux of the matter is the charging of liquidated damages. The Council needs to decide if they want to pursue liquidated damages from Boser and deduct $6,500 from their final payment, or if the Council wants to close out the Contract with Boser and pay the full contract amount. The Council has the right in the Contract to pursue liquidated damages from BCI per the following excerpt from Section 8.3 Delays and Extensions of Time. "Pavment of liquidated dama�es shall be in the form o,f a Change Order reducing the Contractor's Contract Sum bv the amount o the liguidated damages. I the Contractor refuses to sign the Change Order or liquidated damages, the Owner reserves the right to unilaterallv reduce the Contract Sum bv the amount o the liquidated dama�If the amount of the liquidated damages exceeds the remaining unpaid balance of the Contract, the Contract Sum shall be reduced by the amount of the unpaid balance and the Contractor shall pay the Owner the difference between the liquidated damages and the unpaid balance. " In pursuing liquidated damages, as Mr. Bankers referenced in his May 22nd email, BCI would probably initiate the Construction Contract's dispute resolution process. While there are other related sections in the Contract, there are specific sections in Article 15 that deal with claims and disputes along with various processes and timelines. After a claim has been made, an initial decision by the architect/engineer is provided. There are various timelines on notifications and such, but if an agreement is not reached, mediation is used. "15.3.1 Claims, disputes, or other matters in controversy arising out of or related to the Contract . . . shall be subject to mediation as a condition precedent to binding dispute resolution. 15.3.3 The parties shall share the mediator's fee and any filing fees equally. " Each party pays its own costs in regards to personnel and attorneys involved in the preparation for, attendance at, and follow-up to a mediation. If an Agreement does not come out of inediation, the Contract calls for either arbitration or litigation.