01-0088R

RESOLUTION APPROVING SETTLEMENT OF CLAIMS OF THE CITY OF DULUTH AGAINST ARCHITECTURAL RESOURCES, INC., DPIC COMPANIES, AND SEAWAY ENGINEERING/SEH IN THE AMOUNT OF $12,500.

BY COUNCILOR HOGG:

        RESOLVED that the proper city officials are authorized to execute a release of claims and accept settlement funds in the amount of $12,500, pursuant to the terms and conditions set forth in that document entitled "release of all claims" (Public Document No. __________________) which shall release Architectural Resources, Inc., DPIC Companies and Seaway Engineering/SEH from all claims as a result of construction plan variations and design oversights which caused cost overruns in city Contract Number 18513 between the city of Duluth and Krech & Ojard, consulting engineers, for construction engineering services in connection with the Lakewalk East pedestrian and bike trail extension.


STATEMENT OF PURPOSE:  In 1999, the city contracted with the firm of Krech & Ojard, consulting engineers, to provide construction engineering services for the Lakewalk East pedestrian and bike trail extension project. During the provision of these services, Krech & Ojard discovered errors in the construction plans and designs which had been prepared by Architectural Resources, Inc., and/or its subcontractors pursuant to a separate contract with the city. As a result of these errors, additional services were provided by Krech & Ojard which caused a cost overrun in the amount of $19,750. The city attorney's office entered into settlement discussion with Architectural Resources, Inc., regarding the errors which resulted in cost overruns and have negotiated a settlement with Architectural Resources, Inc., and its subcontractors in the amount of $12,500. Krech and Ojard have agreed to accept these funds as full payment of the cost overruns. The supplementation to the contract with Krech & Ojard is presented by separate resolution.

The civil division of the city attorney's office, with the assistance of the city architect, has investigated its claim and analyzed any potential recovery and the costs associated with pursuing further litigation. The city attorney's office recommends this settlement.