Talk about sticker shock.
Expecting a change order last fall in the neighborhood of $60,000, the Port of Sunnyside instead received a bill for $485,000 from Marysville contractor TEK Construction.
"We were surprised and shocked," Port Manager Amber Hansen said of the nearly half-million dollar change order received six months ago. The charges were delivered in a two-inch binder, she said.
The change order was part of an overall $6 million project for new sequencing batch reactors at the Port's wastewater treatment plant. The reactors help remove impurities from wastewater.
But there's no way the change order should have been $485,000, port officials felt.
"We started trying to negotiate, to ferret out the change orders that were requested," Hansen said.
The project was completed last May, seven months behind schedule, but the port and TEK were in negotiations through this week when the stalemate was finally broken.
Late Monday night, representatives from the Port of Sunnyside and TEK Construction met with a mediator in Sunnyside and agreed to a $205,000 settlement in which the port would pay TEK that amount to formally close out the project.
The pact concluded a day full of meetings for Port commissioners, which first met at 2 p.m. on Monday. It was midnight or later on Monday when Port representatives returned from mediation in Seattle.
So why was TEK's original bill of $485,000 more than eight times what the port estimated it would be?
The crux of the problem, according to a statement prepared by the Port's attorneys at Preston, Gates and Ellis, involved TEK subcontractor, Aqua-Aerobic. The Chicago-area company had the responsibility of developing the electric panels that run the sequencing batch reactors.
"The subcontractor stated to TEK that it would provide equipment which would meet the function specified, but not necessarily the configuration specified," Port attorneys wrote. "This information was not passed on to the Port or its consultants. The resulting delays in redesign of its equipment, and delays in reviews would have been reduced if better communication was had by all parties, when it became obvious a misunderstanding existed."
Hansen said that since Aqua-Aerobic's equipment did not fit the dimensions of the port's wastewater facility, the company had to stop and re-design its equipment on-site.
That in turn led to delays and the cost over-runs.
The $205,000 settlement between TEK and the port does not place blame with either entity.
As part of the agreement, TEK will not charge the port for its subcontractor's down time, and the Port will not assess financial penalties for the delay in receiving the finished project.
Hansen said there could be actions by TEK against Aqua-Aerobics, but that would not involve the port since its contract was only with TEK.
The Port of Sunnyside paid for the new sequencing batch reactor project with a combination of grants and low interest loans totaling $4.5 million. The remaining costs of about $1.5 million was funded through new bonds and existing port funds.