Governor asking lawmakers to accept $11.4 million to settle suit against builder of problem-plagued highway

Proposal would settle claims for less than half what state originally sought for Timpanogos Highway.<br>

(Photo courtesy of Utah Department of Transportation) Photo of the S.R. 92 Interchange at Interstate 15. Lawmakers are being asked to accept $11.3 million to settle a state lawsuit against a contractor over the problem-plagued Timpanogos Highway.

Although the state sought $29.4 million in a lawsuit against the contractor that built the problem-plagued Timpanogos Highway between Lehi and Alpine, lawmakers are being asked to settle it for less than half of that amount — $11.4 million.

That was unveiled Monday in a new resolution, SJR101, that Gov. Gary Herbert asked the Legislature to consider as part of a special session on Wednesday.

The rebuilt six-mile section of State Road 92 was finished 10 months late in 2012 amid quality complaints. The Utah Department of Transportation also had charged $4.5 million in late fees to the contractor, Flatiron/Harper Joint Venture.

Flatiron also was part of a different consortium — Flatiron/Skanska/Zachry — that created huge controversy in 2010 after disclosure that it was quietly paid $13 million by the state after it said it was cheated out of a $1.1 billion contract to rebuild Interstate 15 in Utah County by the way UDOT tweaked scoring of bids.

That contract went instead to Provo River Constructors. Principals in that group had contributed $82,500 to Gov. Gary Herbert’s election campaign in the months before and after the bid was awarded.

A state auditor’s report later found no wrongdoing or political pressure by UDOT and Herbert over the bid, but said it could not determine whether the bid process and settlement payment were fair because of a lack of documentation.

The state’s lawsuit against the Flatiron/Harper Joint Venture said the SR-92 project “was beset with many design and construction quality” issues resulting from “Flatiron’s staffing and management deficiencies, as well as poor workmanship…. Flatiron had to redesign or tear out and repair many parts of the project.”

The lawsuit also asserted that “a large number of key retaining walls had to be built and rebuilt multiple times. Flatiron attempted many times to seal bridges to prevent their leaking. Flatiron’s work resulted in over 500 cracked or defective roadway panels.”

The partnership between Flatiron and Harper fell apart in November 2010 and Harper abandoned the project, according to the suit. UDOT said Flatiron contended Harper’s exit would not impact the project, but the agency said problems skyrocketed afterward.

The new resolution notes that the contractor filed a counterclaim against UDOT “alleging breach of contract and breach of the implied covenant of good faith and fair dealing.”

It says UDOT and the contractor participated in formal mediation that developed the proposed settlement.

It calls for the contractor to pay $8.4 million to “cover the cost of long term maintenance and repair of defective work,” plus $3 million “in liquidated damages.”

UDOT agrees, under the proposed settlement, to pay some balances owed to the contractor under the original contract. It says contractors will receive $102 million of the original $113 million contract.

Because of legislation enacted after the controversy over the quiet $13 million payment made earlier to Flatiron/Skanska/Zachry, the resolution notes that some settlements of more than $1 million must be approved by both the governor and Legislature before an agency such as UDOT may sign the agreement.