UI has not yet paid Modern Piping in full, contends as-built documents for Children’s Hospital are needed

The UI has not yet paid the construction company for its work on the UI Stead Family Children’s Hospital because it contends Modern Piping has not provided final construction records.


File/The Daily Iowan

FILE – The Old Capitol is shown on Monday, July 25, 2016.

Marissa Payne, Managing Editor

The brunt of the court-ordered payment the University of Iowa owes construction company Modern Piping has still not been paid out as the UI says it awaits final construction records of the Stead Family Children’s Hospital.

The UI on Thursday said it has paid the Cedar Rapids construction firm for work on the Hancher Auditorium — a total exceeding $4 million. 

But officials with Iowa City architecture firm Heery confirmed in an email exchange on Monday with UI Senior Vice President for Finance and Operations Rod Lehnertz that they still need final as-built construction records for work on the UI Stead Family Children’s Hospital.

The documents needed include corrected as-builts, a building information model, and LEED submittals, Heery Vice President Scott Hansche wrote in an email exchange to UI officials. Heery’s review of these documents would “fulfill the contractual obligations from Modern Piping,” he said.

“This payment was disbursed because the design professional on the Hancher project, OPN Architects, had received, reviewed, and approved the final construction record documents … according to the original Modern Piping contract,” UI spokeswoman Jeneane Beck said. 

The UI now owes Modern Piping more than $13 million of a $21.5 million court-ordered arbitration award for its work.

UI President Bruce Harreld, with support from the state Board of Regents, on April 18 said the UI would not pay the company the remainder of the award until the university receives the as-builts that Modern Piping contractually agreed to provide. 

“The war of words between the University of Iowa and Modern Piping is unprofessional and unfortunate,” Harreld said in a statement on Thursday. I would like to publicly apologize for playing a role in this escalation.”

Modern Piping officials contend they have already provided those documents to the UI. The company has provided an image of a folder that Modern Piping attorney Jeff Stone said indicates the company has provided the as-builts.

According to a timeline the UI provided documenting communication between contractors Heery, Gilbane, and Modern Piping, “Heery/WSP inadvertently have no exceptions taken,” on the Children’s Hospital bid package in question. “Heery/WSP believes approval valve location drawings only, not full as-builts.”

This includes a sheet showing Gilbane reviewed the documents in September 2017 and January 2018, noting valve schedules were submitted separately. The sheet also shows Heery reviewed the documents in  June 2018 and stated “no exceptions taken.” Those documents noted the review does not relieve the contractor from compliance with contractual obligations.

On Monday, UI officials said the university was prepared to place the entire amount it owes Modern Piping plus interest into an escrow account until the as-builts are provided.

“They have failed to respond and as such the UI will place the money into an account administered by a third party,” Harreld said. “Once Heery, the third-party design professional firm for the project, receives, reviews, and approves the final construction documents Modern Piping will immediately receive full payment.”

Harreld said he is frustrated with what he described as a failure of communication and common sense.

“Let’s now move forward so the focus can shift to what matters — safely continuing the exceptional care provided for children in the University of Iowa Stead Family Children’s Hospital,” he said.