|
| Dispute between Port Authority and Ilse updated 3/20/2000, update 3/30/00 Latest, see bottom of page There is currently a dispute between the Port Authority and Ilse Engineering Inc. on completion of the work. Though all of the buildings have been demolished, and processing of material is substantially underway, the Port has recently attempted to terminate the contract of Ilse Engineering. The project is running over the original time frame and the Port has used this as the reason for the attempted termination. Though there is an understandable and genuine concern on most of the good staff at the Port that this project be concluded as reasonably as possible, there is an undercurrent of just a few there who have played on these concerns and blown the time delay into a perceived crisis. This demolition work was originally bid to be performed over a long time period in order to allow the demolition contractor to be as efficient and innovative as possible and to pass those cost savings along to the port in the form of a lower bid. Several million dollars were saved by performing the project this way. As human nature would have it though, most people looking at the project day after day tend to forget that the plan was to have it last a long time. Yes, it is running a bit longer than expected on time but it is not the crisis depicted by those few at the port. Though the time frame has gone over slightly, there are no cost overruns. There are late penalty provisions written into the contract that address time overruns. Ilse Engineering Inc is fully willing to comply with those penalty provisions. Nobody terminates a contract because a simple time overrun. All that remains of the work is to continue processing the rubble left over from the blasts, grade it out, be done, and get paid. The brain surgery part of this job is done, all that remains is to keep turning the crank on all of the equipment that was brought in to do the final processing. As of Friday, March 3, 2000 a proposed method of finishing the project was presented to the port by the bonding company. Under this proposal, the bonding company will be involved as a partner in the completion of the project in an oversight role. Ilse Engineering would finish the project as it originally intended to do. llse will bring on an additional subcontractor to assist in movement of material. There are financial terms included which are intended to increase the security of both the port and the bonding company and which will provide needed income for the port in the form of additional land lease payments. A realistic time schedule for completion is included. The port has recently held the position that the bonding company should be involved. This proposal which includes the bond company, though not to everyone's liking, provides an opportunity for a realistic solution to our differences and a positive route to completion of the project. I can't believe the latest turn of events at the port. As recently as last Thursday an agreement appeared nearly in hand. I had even returned to the site and was preparing equipment for a startup The primary option of the bonding company was to simply complete the job with me. They had expressed their desire to do just that. Mr. Maki, the port attorney had been throwing up obstacles for several weeks but we had been jumping through all the hoops. At the last minute, he demanded that the late penalty be raised to fifteen times what the contract called for. The contract bond specifically states that the bonding company cannot be liable for any more than the original contract. The only way the bond company would be able to live with this massive increase was to use another contractor who would provide his own bond and take on the potential liability. This is totally outrageous and hardly reflects the intent of the wishes of the port board. They voted that the issue should be in the hands of the bond company. What Mr. Maki has done is force the bond company to use another contractor. Why is Mr. Maki, the port attorney so hell bent on destroying me? Could it have something to do with my having pointed out the fact that he has a one-third ownership, in his wife's name, in a competing local contractor. Or maybe that his company did work for the port without him properly notifying the port of his conflict. His company also completed their work for the port nearly 80% late without any apparent consequences (quite unlike the treatment I am now receiving). Maybe it had something to do with his company bidding this elevator demolition work and still not informing the port of his involvement in the other contractor. Or that he wrote a section of the bid documents that his company was bidding on? This section was written in evasive language and tucked into the back of the bid documents. It gave his company the potential of a several hundred thousand dollar savings if he were to get the job. It may have something to do with the fact that when the elevator demolition bids were first opened, nearly all the contractors in the room congratulated me on being the low bidder. (There was some confusion on the bid form but it was clear what each contractor meant by his numbers) The next day, I received a fax from LHB Engineers showing his company bid having miraculously dropped to nearly two thirds of its value from the day before. I protested this change and LHB later recommended that all of the bids be rejected and the project be bid over again. Could the fact that he misrepresented facts to the port board in an attempt to have my contract terminated be a factor? It looks as though there is going to be a bruising lawsuit over this one. Hopefully the port board will look seriously at the actions of their attorney and come to their senses on this. While the project is running over its original time schedule, it would have been done around April were it not for the interference of the port attorney Mr. Maki. Out of the two and a half years allotted for the project it is presently five months over on time frame. The project has been tied up in arguments and senseless maneuverings for an equally long five months. As it is, it looks like whoever does the work, will not be done until late summer. The only winner so far is Mr. Maki who continues to collect hefty legal fees from the port to straighten out the mess that he was largely responsible for creating. Update 3/30/00 To give some perspective on the handling of the bond company involvement, I note that I received a letter from a local civil engineer who, in the last sixteen years, worked on nearly a hundred construction projects. On the occasions that the bond company was brought in, ALL of the projects were completed by the original contractor under the watchful eye of the bond company. The vengeful actions of the port in forcing my bond company to use another contractor by tactics that were in clear violation of the terms of the bond agreement are contrary to industry practice. My exposing of the wrong-doings of the port attorney is the basis for their bizarre action. There is a core group of staff at the port that has been together for nearly twenty years. In an honest and open working environment this can result in a very rewarding work experience. However, when this is abused, as it is at the port, it degrades into a "good old boys club". I exposed serious wrong-doings of the port attorney and would do it again in a moment. I didn't realize that I had attacked a member of the port club. They have found their method of retaliation. It has little to do with when the job gets done. It has to to with protecting their turf and lining their pockets. The above represent some very serious charges against Mr. Robert Maki. the attorney for Duluth Seaway Port Authority They are fully documented in the form of records from the Minnesota Office of Secretary of State, C&D Elevator demolition documents, fax transmissions, and correspondence on the recent dispute. Copies of the above are available to interested parties. If you would like to receive an update on the status of the resolution of the dispute send me an email
|