University of Iowa to request Board of Regents’ action to resolve Modern Piping, Merit

lawsuits

The university will seek permission from the Board of Regents, State of Iowa, during its meeting
on April 18, 2019, to increase the project budget for the University of Iowa Stead Family
Children’s Hospital in order to pay the arbitration award to Modern Piping as well as a
settlement agreement reached with Merit Construction.

The university will pay Modern Piping $17.9 million, which reflects the arbitration panel’s
award, minus the payments already distributed by the university to Modern Piping.

With this additional $21.4 million the university will have paid Modern Piping $73.9 million for
work on the UI Stead Family Children’s Hospital and Hancher Auditorium. Modern Piping was
awarded attorney fees and expenses in the amount of $724,912.38.

The UI has settled the dispute involving work done on the hospital by Merit Construction for
$9.4 million. With this payment the university will have paid Merit Construction $63.2 million.
Merit was awarded attorney fees and expenses in the amount of $1,172,193.48.

The University of Iowa Hospitals and Clinics, a self-supporting enterprise, will pay for the
requested increase of its project budget for the UI Stead Family Children’s Hospital.

The university, in conjunction with the Board of Regents, has reviewed and improved its
contracts, procedures, and delivery methods as it relates to construction projects.

The UI is pleased to have concluded these matters.

 ADDITIONAL INFORMATION

Modern Piping Award - Final Settlement Proration to Hancher and SFCH

Full Cost with Interest Hancher SFCH

$
Hancher $ 4,668,796.18 $ 4,668,796.18 -
SFCH $ 16,334,135.40 $ - $ 16,334,135.40
AAA & arbitration costs $ 490,198.23 $ 108,967.44 $ 381,230.79
Total Award $ 21,493,129.81 $ 4,777,763.62 $ 16,715,366.19
Less: Oct. & Dec. CARs (corrective action
requests) for SFCH $ (1,547,639.27) $ (1,547,639.27)
Less: Payment retainage & interest $ (2,996,137.67) $ (625,466.07) $ (2,370,671.60)
Subtotal $ 16,949,352.87 $ 4,152,297.55 $ 12,797,055.32

Additional Interest $ 972,122.60 $ 238,170.04 $ 733,952.56

$
Adjustment to settlement amount $ 4,653.66 $ 1,140.15 3,513.51
Total through 4/19/19 $ 17,926,129.13 $ 4,391,607.74 $ 13,534,521.39

Totals paid for Modern Piping

• Paid by the UI: $56,039,584.34
• To be paid by the UI: $17,926,129.13
• Total paid: $73,965,713.47

Totals for Merit Construction

• Paid by the UI: $53,898,575.04
• To be paid by the UI: $9,400,000
• Total paid: $63,298,575.04

How much is the university’s requested total construction budget for the UI Stead Family
Children’s Hospital?
• $392.7 million

How much is the total construction budget for Hancher Auditorium?

• $175.5 million