Sales tax is typically included in the contractor bid item unit prices on construction projects. Halme Construction, Inc did not include this with their bid price and therefore requested that the City pay approximately $112,000 in sales tax for certain bid items identified in the plans pertaining to the City's Municipal Solid Waste Cleanup project at the former Mill Site. The city engineer denied their request. Halme Construction, Inc. then filed a claim against the City for the sales tax.
In addition, Halme Construction, Inc. requested that the City pay approximately $125,000 for additional work they had to do because of compaction issues related to common borrow. The city engineer evaluated the project documentation and denied their request. Halme Construction, Inc. notified the City that they would be filing a claim regarding this issue as well.
The city engineer and Halme Construction, Inc. agreed to non-binding mediation in an effort to resolve the dispute. Mediation was successful and Change Order 7 - Claim Resolution, provided a settlement payment of $100,000 for both claims eliminating the need for arbitration. |