Public Affairs

July 20, 2007

UA reaches settlement in museum dispute


For Immediate Release
Friday, July 20, 2007

The University of Alaska Board of Regents has approved a settlement of claims among the university, the general contractor who built the UA Museum of the North on the University of Alaska Fairbanks campus, and the design team involved in the project.

In a special audio conference meeting Wednesday, the board approved a comprehensive settlement of all claims between the university, its museum design consultants (GDM Inc.; Hammel, Green and Abrahamson Inc.; Planning, Design and Consulting Inc.; and Coffman Engineers Inc.) and general contractor Alaska Mechanical Inc. Under the terms of the settlement, AMI will receive an additional payment of $6.25 million. Of that amount, $1.6 million will come from the design team through a payment to UAF. The balance, $4.65 million, will come from university reserve funds available for such contingencies.

The settlement, tentatively reached June 21 after a three-day mediation, means all claims pending before an administrative hearing officer will be dismissed. Those claims include AMI's $18 million claim against the university for additional time and alleged cost overruns on the project, the university's counterclaim against AMI for delay damages, and UA's contingent claims against the architects. As is usually the case with construction contracts, the general contractor is responsible for resolving any outstanding claims from its subcontractors or suppliers.

"This is a reasonable and fair settlement, and it allows all parties to move on to celebrate the completion of this world-class facility," UA General Counsel Roger Brunner said. "The settlement reflects recognition by all parties of the significant expense of construction litigation and the uncertainty of the eventual outcome."

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For more information, call Kate Ripley at 907/450-8102 or 907/388-3506.

NR14-07

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