State board approves $5.3 million payment to prison contractor

DES MOINES - Approval of a $5.3 million payment from the state general fund will keep the transfer of prisoners from a 176-year old prison to a new 800-bed maximum security prison at Fort Madison on schedule for later this year.

The payment to Walsh Construction, the general contractor on project, was the result of mediation. Walsh 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 a variety of problems on the $132 million project that has seen a series of delays and cost overruns.

A professional mediator ruled the state should pay about 40 percent of the amount Walsh sought to settle all outstanding claims for work beyond the scope of the contract.

The State Appeal Board members Monday approved paying Walsh $5.3 million from the state general fund because no appropriated funds were available.

Three subcontractors have claims against Walsh in the amount of $415,717, said Jeffrey Thompson, state solicitor general. By law, the state retains double that amount so it will hold $831,434. Once the claims are settled, he said, the full amount could be paid to Walsh.

With claims being settled, the move from the current Fort Madison penitentiary to the new facility appears to be proceeding on track, according to Department of Corrections spokesman Fred Scaletta.

'We're still in the process of getting everything situated, but we're continuing to move forward,” he said Monday.

He doesn't know - and for security reasons won't say - when the actual transfer will occur. However, Scaletta said the retraining of prison staff to operate the prison has begun, and he anticipates moving prisoners later this summer or in early fall.