FARGO-North Dakota State University is seeking approval to hire a law firm to defend a lawsuit by a construction company to recover $1.3 million for what it said were extra costs incurred for an accelerated completion deadline for a classroom building.
The dispute involves costs associated with the $29.4 million A. Glenn Hill Center, which houses classrooms and laboratories for teaching courses in STEM-science, technology, engineering and mathematics.
Roers Construction, the general contractor for the project, claims that it accrued significant added costs because of a series of delays it blamed on poor designs for the building. Roers Construction claimed it was burdened with significant additional "acceleration costs" when it had to rush to complete the building to accommodate a dedication ceremony for the building's opening in December 2015.
Last November, the State Board of Higher Education authorized NDSU to enter mediation with Roers Construction to try to settle the dispute. But documents from staff of the North Dakota University System report that mediation does not appear to be a viable option.
"This action requires NDSU to respond to the claim and enter into litigation in lieu of pursuing mediation," a staff memo to the state board said. "Litigation costs are dependent upon many factors which are not yet known."
Chancellor Mark Hagerott is recommending that the board approve hiring the law firm of Stinson Leonard Street, which has offices in Bismarck and Minneapolis, to represent NDSU in litigation. No dollar amount is associated with the request.
A committee of the State Board of Higher Education approved the request, which is expected to be considered by the full board at its next meeting on Thursday, Feb. 22, after being told by Matt Hammer, an assistant attorney general representing NDSU, that Roers Construction did not respond to an offer to mediate the dispute.
A letter from an assistant attorney general to Roers Construction said only about $30,000 remained available for the project, so the North Dakota Legislature would have to approve any additional money for legal costs as well as a settlement or judgment.
Aaron Dean, a lawyer who represents Roers Construction, said the company is still open to mediation, although it filed a lawsuit in January in Burleigh County District Court.
"Roers Construction is committed to mediation with NDSU," he said. "We'll mediate at their convenience. We can't be forced to mediate, though, and only recover less than $30,000."
Roers Construction argued that it was required to hasten completion of the project by several months in order to have the building ready for a dedication ceremony, despite lengthy delays it contends were caused by designers and other contractors.
The ceremony was attended by politicians and executives of Doosan, the parent company of Bobcat, which donated $3 million for the project.
NDSU filed a motion to dismiss Roers Construction's lawsuit, arguing that the contractor failed to meet the deadline specified in the contract for submitting a claim.
"NDSU does not comment on pending litigation," said Sadie Rudolph, a spokeswoman for NDSU. "This matter will be resolved in court, and NDSU has moved to dismiss the complaint."