Haggling begins over delayed St. Croix bridge project

Minnesota and Wisconsin transportation officials are studying cost impacts and renegotiating terms of the St. Croix River Crossing contract with bridge builder Lunda-Ames now that the opening of the bridge has been delayed a year.

Besides changing the contractual completion to fall 2017, the states’ departments of transportation and the builder are haggling over other contract terms, including language that penalizes the Lunda-Ames joint venture $20,000 for every day the project is delayed after Nov. 30, 2016. That could add up to as much as a $7.3 million penalty if the project is delayed a full calendar year from Nov. 30.

Those penalties “may not change at all,” MnDOT’s St. Croix Crossing spokeswoman Kristin Calliguri said in an email. “It will just depend on how negotiations go.”

The bridge, which will span the St. Croix River between Oak Park Heights and St. Joseph, Wisconsin, was supposed to open this fall, but the states’ transportation departments announced late Wednesday it won’t open until fall 2017.

MnDOT blamed the delay on complications ranging from uncooperative weather and labor and material shortages to equipment breakdowns and overall project complexities.

Calliguri said it’s still to be determined how the delay will affect the project’s estimated cost of up to $646 million. The project is being funded by a combination of state and federal money.

Black River Falls, Wisconsin-based Lunda Construction and Burnsville-based Ames Construction won the $337 million bridge superstructure contract in 2013. The joint venture couldn’t be reached for comment Thursday.

MnDOT’s project budget is in the $617 million to $646 million range, including non-bridge work such as the Minnesota and Wisconsin approaches. Up to now, the estimate for the bridge itself has been $376.5 million.

“If anything gets impacted, it will be that cost,” Calliguri said.

Calliguri said the project still has $11.25 million in contingency funding for the bridge portion of the project. To date, contingency funds have been spent on change orders, supplemental agreements and cost overruns for the overall project, Calliguri said, adding that it’s not clear if the project’s contingency will need to be used in connection with the delay.

“There are many factors contributing to this delay, so that is just something that MnDOT and the joint venture are going to have to work through — to figure out who owes what, basically, and where the budget stands now,” she said.

The Lunda-Ames contract previously was amended from an initial completion date of July 28, 2016, and $50,000 in daily liquidated damages.

Lunda-Ames knew as long ago as last spring that the project was headed for a delay.

In a June 2015 supplemental contract agreement, Lunda-Ames asked MnDOT for a contract time extension related to “extraordinary delays in material delivery,” and indicated that the fall 2016 completion date was “not attainable.”

State Rep. Kathy Lohmer, R-Stillwater, said it’s “disappointing” that the bridge opening is being delayed another year. But people also understand that a lot of things happened that are out of the project team’s control, she said.

Asked about the potential cost impacts and whether she’s concerned that the state might be asked to pony up more money for the project, Lohmer said she doesn’t want to “borrow trouble.”

“Is this going to increase the cost? Nobody seems to know that,” she said. “There is a lot of discussion going on with the joint venture. They just don’t know. There are a lot of unanswered questions.”

Ground work for the project, which is replacing the old Stillwater Lift Bridge, began in late 2012.

According to MnDOT, the project has been stung by, among other things: a struggle to find enough skilled workers, the complexity of building a 3,200-foot-long span over federally protected waters, high water levels and an early winter.

Delivery of concrete forms for the bridge segments was delayed five months in 2014 because only two American companies make those forms, and the “selected company’s owner died and the company subsequently lost its lead engineer,” according to MnDOT.

“The timing of these events caused the company to delay fabrication of the forms,” MnDOT said.

Making matters worse, the “segment shuttle crane” at the project’s Grey Cloud casting yard “broke down several times” last year, which delayed the movement of segments onto the barges, MnDOT said.

MnDOT said each breakdown resulted in delays “lasting from one day to one week.”

With the accumulation of those problems, it’s no surprise that the project’s schedule has been thrown out of whack, said Don Kohlenberger, president of Hightower Initiatives, a construction consultancy in Minnetonka.

“One particular thing would not necessarily break the camel’s back, but when you have all those things and such a high level of specialization, I can understand that,” he said.

Michael Beer, MnDOT’s St. Croix Crossing project director, said in a statement Wednesday that the new completion date is “well within the project team’s capability to meet.”

“It’s a large and complex project, and we want to be sure that it is done safely and meets our high standards for quality,” Beer said.

Work continues on land, in the casting yards, and in the river as long as the weather allows, Calliguri said.

The project’s schedule and budget aren’t the only casualties.

J&L Steel and Electrical Services, which held the contract to install steel for the massive bridge, had to leave the job last spring. The project’s aggressive schedule and design and engineering complexities created cash flow problems for the subcontractor.

The company later shut down its steel operations, and sold its electrical operations and its Hudson, Wisconsin, headquarters building to pay off debt from the project, company president LouAnne Berg said.

Berg reiterated Thursday that she’s not surprised about the delay. But she sounded like someone who is ready to move on after 38 years in the construction industry. “There has been enough negativity in this industry for my tenure,” she said. [youtube https://www.youtube.com/watch?v=j1f09i0zEKQ]