Both sides dig in on Children's Hospital feud

Millions of dollars - and safety - at stake in dispute

Members of the Iowa Board of Regents and University of Iowa President Bruce Harreld get a tour Sept. 7, 2016, of the Uni
Members of the Iowa Board of Regents and University of Iowa President Bruce Harreld get a tour Sept. 7, 2016, of the University of Iowa Stead Family Children’s Hospital as it is under construction. The UI continues to be a dispute with one of the hospital’s contractors, refusing to pay it millions while asserting it never got important construction documents detailing what’s behind the walls of the hospital tower. The contractor said it provided the documents months ago. (Rebecca F. Miller/The Gazette)

IOWA CITY — The University of Iowa on Friday paid $9.4 million it still owed contractor Merit Construction for work on its Stead Family Children’s Hospital, but continued withholding a much larger payment to another contractor it’s accusing of wrongdoing and not providing crucial construction documents.

Documents examined Friday by The Gazette offer support to both sides of the long-standing and increasingly bitter feud between the university and contractor Modern Piping of Cedar Rapids.

With the two sides at loggerheads in the dispute over documents, at stake is nearly $18 million that Iowa courts repeatedly have ruled the UI must pay to Modern — as well as the university’s capacity to deal with construction defects or emergencies emanating from within the tower that holds 190 pediatric beds.

The dispute is over construction documents called “as-builts” — records showing just where the electrical wires, gas lines, valves and so on are in the walls of the 14-story structure that opened in 2017.

Modern said it repeatedly has provided the documents the university is demanding, despite UI assertions it doesn’t have them and won’t pay until it does.

Records obtained Friday by The Gazette appear to show that Gilbane Building Company — a Chicago firm hired to manage construction of the Children’s Hospital — reviewed and signed off on 136 pages of documents labeled “as-builts” in September 2017. Gilbane again confirmed reviewing the documents in January 2018, the records show.

And the Children’s Hospital project’s design professional, Heery International, signed off on “as-builts” with “no exceptions taken” on June 6, 2018, documents show.


And an Oct. 25, 2017, email from Modern to Gilbane states the firm had provided “all of our as-built drawings.”

But Modern’s insistence it already provided the documents it believes the contract required is misleading, the UI has maintained.

On Thursday, UI President Bruce Harreld told the Board of Regents meeting in Iowa City that “we have had some concerns about some of the work, and we have had to deal with those concerns on an ongoing basis.”

Harreld and members of the board accused Modern of extortion by refusing to provide the documents until the UI pays even more than what the courts have already ordered.

Harreld — and the regents — at one point questioned whether Modern did its due diligence in documenting its work and whether the documents even exist.

Harreld raised the prospect that the patients are at risk since administrators and security personnel don’t know in detail what lies behind the hospital walls.

In response to questions from The Gazette about the records indicating the UI already had received the “as-builts,” university spokeswoman Jeneane Beck said administrators met with project consultants to evaluate the contention. Those consultants, according to Beck, provided to the university “very detailed data and dates that make clear that the cover sheet being shared does not indicate that the project record documents/as-builts have been submitted to the design professionals and approved as in compliance with the construction contract.”

Modern Piping executives refuted that, saying they’ll provide the documents again — even before the UI pays what it owes or signs a settlement — if the university publicly admits having had them all along and retracts the extortion accusation.


“If they agree to this, even before they sign it, we will deliver the additional copies,” Modern Piping Chief Executive Officer Ken Brown said Friday. “We are going to go over and above everything they asked for. All they have to do is say, ‘We made a mistake. We did have them. We are thankful they’re going to give us additional copies and provide these additional resources for us.’

“Then just wire us the money sometime this weekend, and we’re done,” Brown said.

But the UI dug in, providing emails from the design firm in January 2018 requesting the construction details in a specific form.

“We have not seen these nor has Gilbane or Capital Management,” Heery Vice President Scott Hansche wrote to Gilbane and UI officials in January. “What Modern has submitted as record drawings is their shop drawings and the model. Not one set of drawings showing changes made in the field.”

That message, however, was written months before the records obtained by The Gazette indicate the firm signed off on the documents with “no exceptions taken” on June 6, 2018.

Still, in an email Friday to the UI, which was provided to The Gazette, Hansche maintained that not only has it not received “corrected Modern as-built drawings,” it hasn’t received “any as-built drawings” from Merit, either.

Nonetheless, UI paid Merit, also of Cedar Rapids, on Friday.

Asked why the university paid Merit without the records but is not paying Modern for the same reason, Beck said, “Because we have signed a settlement with them” and Modern “won’t agree to the same terms.”

Both Merit and Modern won hefty awards for unpaid work on the Children’s Hospital, which was plagued by mismanagement, thousands of design changes, cost overruns and schedule delays, as reported by The Gazette.


In its statement, the UI said it’s placing the award ordered for Modern in an escrow account with instructions to pay “as soon as we have the as-builts.”

The statement included an email showing one reason it was important for the UI to have the drawings. The UI ran into an issue in January “where there is a strong sewage smell that our engineering services and design team are having difficulty tracing the source of.”

“I would like to request that Modern assist us in the resolution of this by allowing us trace the as-built … to see what’s going on,” a UI executive wrote.

But a Modern executive replied that “our hands are tied” while the dispute was in litigation. The as-built documents, in the meantime, “are sitting on my desk ready to deliver.”

Beck said that underscores the UI’s concerns about having the correct construction records.

“The university has done work to mitigate the sewage smell, however as future issues arise, we need the documents in order to make repairs as quickly as possible,” she told The Gazette.

l Comments: (319) 339-3158;

Give us feedback

We value your trust and work hard to provide fair, accurate coverage. If you have found an error or omission in our reporting, tell us here.

Or if you have a story idea we should look into? Tell us here.