Village, C.D. Smith settle dispute over project delays

Board votes 5-2 to waive $214,500 in liquidated damages, accept company’s offer to cover engineering costs
Ozaukee Press staff

The Grafton Village Board on Monday approved a compromised with contractor C.D. Smith on a payment dispute regarding the headworks facility construction. Trustees passed the motion by a 5-2 vote opposed by Trustees Dan Delorit and Amy Luft.

The compromise will waive the $214,500 in liquidated damage fees and C.D. Smith will pay roughly $60,000 in engineering overage costs.

A contract states that C.D. Smith would pay the village $1,000 a day if they did not meet the June 14, 2021, substantial completion deadline and $500 a day after the Aug. 14, 2021, total completion deadline. C.D. Smith did not substantially complete the project until Aug. 16, 2021 and the project wasn’t completed until June 13, 2022 — 303 days after the original deadline. As a result, C.D. Smith was charged $214,500 in liquidated damages.

C.D. Smith contended that the village could not charge the company more damages than the village actually accrued from delayed construction, noting the contract language between the two parties states the fee could not be used as a penalty.

Dane Bernau, vice president of C.D. Smith, told the Board of Public Works on Aug. 8 that Covid-19 and staffing limitations resulted in the delay.

“Covid-19 has been a challenge. It has caused all industries to lose money for one reason or another and to work through difficulties,” Bernau said. “We continued to work to the best of our ability with the resources that were available.”

Despite this, Board of Public Works members were conflicted on how to handle the situation but moved the resolution for Village Board action where trustees were met with the same dilemma.

“I’m conflicted on the issue. It was a very difficult vote for me,” Trustee Jim Miller said.

Miller said he “respects (Delorit and Luft’s opposing) votes as it was not an easy decision.”

“There was a contract in place and I value that,” Miller said. “I thought about it for several days but financial purposes swayed me.”

Miller said compromising with C.D. Smith is in the best interest of the village while also recognizing that the company was “handcuffed” with limitations brought on by the pandemic.

“We’ve had a good relationship with C.D. Smith over the years,” Miller said. “They are a reputable company.”

Miller said he is optimistic the compromise will not impact Grafton’s relationship with contractors nor does he think the compromise will set a precedent for leniency toward contractors.



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