The failure of a contractor to complete a modernization project in a water treatment facility in the North Koochiching Area Sanitary District has prompted the district to seek mediation of the contractual breach. Gridor Construction, Inc., had agreed to have “substantially” completed the project by December 27, 2014 when it signed the contract with the district. The district claims it is due damages of $500,000 as a result of the failure.

The contract had provisions for daily fines of up to $2,000 per day in addition to the base charge to the contractor when the deadline was missed. The treatment plant is operational and is exceeding its minimum efficiency requirements, but is not completed. However, even the district acknowledges that the work yet to be done is largely “aesthetic” in nature. The district has even had students in the renovated facility for tours.

While Gridor has not officially commented on the disagreement, they have yet to confirm the fines and the district has stated that the contractor has “excuses” for the missed deadlines, excuses the district rejects. The district has stated that they expect Gridor to complete the work, the only question that needs to be settled via mediation is how much the fine for the missed deadline should be. Considering the contractor willingly and knowingly signed the agreement when they were awarded the project, it is likely they will have to agree to some amount of a fine as a result of their failure to complete; however, in mediation they may be able to mitigate the charges if their arguments are compelling or if they can demonstrate the district itself caused some of the delays.