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Bend Settles with Contractor for $3.2M

BEND, OR -- The City of Bend has resolved a lawsuit with Apollo Inc, the company originally contracted to build a new sewage treatment facility. The Water Reclamation Facility Project began in 2013, and was plagued by delays and cost overruns. City manager Eric King says funds were withheld from Apollo because work was deemed unsatisfactory, and the project was further delayed by a lawsuit. "That contract - We weren't happy with their performance and decided to descope their work," King tells KBND News, "So they're about 3/4 of the way through, and before they got into some of the existing facility and retrofitting, we just weren't happy with their performance."


In 2017, the city negotiated directly with M.A. Mortenson, the only contractor deemed qualified to complete the job, making an exception to the low-bid contractor process usually used for capital improvements. But, issues with Apollo Inc continued. King says, "[There were] Many attempts to try to settle that lawsuit, mediations, etc., and we did finally settle it." City Council approved the settlement last week, "This Settlement amount was $3.2 million, and the claims from the contractor were well above that," says King. 

Now, he says, it's time to move forward, "I think there's lots of lessons learned in terms of, for very technical projects like this a low-bid situation, we do alternative contracting methods. And we have a practice in place now, over the last couple of years, that demonstrates some good success, like our Southeast Interceptor, for example, where we did a different arrangement, so you're not just always dealing with the low-bid contractor."


The facility is operational, but is not yet fully meeting the city’s needs. The project was originally expected to be complete in 2015.

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