Iowa agrees to pay $7 million toward repairs at delayed new prison

DES MOINES - State officials Monday agreed to pay a $7 million piece of the $131 million cost of building an 800-bed maximum-security prison in Fort Madison, but the final financial picture associated with the project plagued by delays, mistakes and cost overruns eventually may be resolved in court.

'I think this is probably a fair conclusion to a bad situation,” said David Roederer, director of the state Department of Management and a member of the State Appeal Board. The board voted 3-0 to approve a $6.965 million settlement with project contractor Walsh Construction Co. that was the result of mediation.

The Chicago-based main project contractor submitted a claim for nearly $18.2 million in December 2013 - more than three years after the initial contract award - to cover the expense of fixing problems at the yet-to-be opened prison. State Appeal Board members were told Monday that a professional mediator ruled the state should pay about 40 percent of what Walsh Construction sought to settle all outstanding claims.

'We had a lot of subcontractors who were not being paid through no fault of their own as it was being tied up in this legal dispute,” Roederer said after the meeting. Board members were told the new prison is expected to be housing inmates by the end of the summer, but Roederer told reporters: 'I've been told that before.”

Jeffrey Thompson, the state's solicitor general within the Iowa Attorney General's Office, called the prison 'a very complex construction project with a lot of details and parties involved.” He said Monday's board decision settled the state's dispute with the project's general contractor, but other issues related to the building's design and functions are unresolved.

'We're just starting the process of trying to track those issues,” said Thompson, which will include evaluating whether some of the parties associated with the project might be potentially responsible for cost overruns and delays for a prison originally expected to cost $117 million.