UI considers using third party to create final Children’s Hospital construction records

The move, if it comes to fruition, could mean the UI would return to the state Board of Regents with another request to increase the Stead Family Children’s Hospital budget amid its dispute with Modern Piping.


Margaret Kispert

The new UI Children Hospital is shown on Wednesday, Aug. 24, 2016. Officials say the project will cost more than $300 million.

Marissa Payne, Managing Editor

The University of Iowa is exploring using a third-party firm to create final Stead Family Children’s Hospital records from scratch — the institution contends it has not received such documents from contractor Modern Piping.

UI President Bruce Harreld told The Daily Iowan in a sit-down interview Thursday that the UI is only beginning to ask whether this is necessary. He said either Modern Piping, the Cedar Rapids-based construction company that worked on the Children’s Hospital, will provide final “as-built” construction records and architecture firm Heery International will certify those are as-builts, or the UI will start from scratch and produce its own.

“… I’m trying to figure out, OK, if I knew exactly how much that cost and had a firm proposal, do I send that to Modern Piping and ask them to pay that, so I send an invoice?” he said. “Do I ask them to use that firm to do it? Do we do it ourselves, pay for it ourselves, and then present the bill to Modern Piping or take legal action to get them to pay?”

There is not a clear estimate of how much time it would take to produce the documents, nor is there a concrete idea of the cost, Harreld said. He noted the range of the cost “starts from low millions to several millions.”

The state Board of Regents in April approved boosting the Children’s Hospital budget by $32.5 million to $392.7 million to pay for the costs of legal disputes with Modern Piping and Merit Construction. However, he said, creating the documents from scratch could mean another increase to the project budget.

UI Hospitals & Clinics, a self-supporting unit, funded the budget increase. 

“… Since I don’t know how much it’s going to cost, I don’t know how much buffer there is between the regents already approving,” he said. “We don’t have what we paid for, what we contracted. We need to fix that.”

At this point, Harreld said, he is beginning to think the as-builts — which show the valves, wiring, and pipes in the hospital walls — may not exist.

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

“Any reasonable person would start asking that question at this stage,” he said. “Here we are with a fairly sophisticated, complex structure that has operational issues every day in it, just the way all buildings do. And we have people that need to go in and know what’s behind the walls … We have had a couple of minor instances we’ve been able to respond to pretty quickly, but you always kind of wonder, What’s behind that wall?”

Harreld’s remarks come after the UI announced it has paid Modern Piping for a portion of a $21.5 million arbitration award, covering the Hancher portion of the court-ordered payment.

An arbitration panel considered the Hancher and Children’s Hospital disputes together in 2017. The award documents state the panel’s “findings are not intended to preclude Iowa from exercising its contractual or common-law rights against Modern Piping to obtain any outstanding as-built documents or the medical gas certifications,” but the findings do “preclude Iowa from asserting back charges for these items or attempting to offset monies otherwise due” under the award.

RELATED: UI backtracks on paying Modern Piping, seeks documentation for work on Children’s Hospital

The UI still owes Modern Piping $13.5 million of the arbitration award for its work on the Children’s Hospital. The university recently placed those funds into an independent attorney’s account.

“Once Heery has approved the contractually required final construction documents, the law firm of Meardon, Sueppel, and Downer PLC will send the money ($13,540,100.60) to Modern Piping,” UI Assistant Vice President for External Relations Jeneane Beck wrote in an email.

Former Regent Bob Downer is a member of the law firm. Beck said he was chosen because he is “a prominent attorney in Iowa City, understands construction disputes and, as a former regent, was willing to assist in attempting to resolve this matter.”

Modern Piping did not respond to requests for comment Thursday, but the company contends it provided the UI as-builts no later than April 2017. The firm’s attorney, Jeff Stone, has provided an image of a “building-information model” folder displaying file names that he said contains the as-builts.

Email exchanges as recent as April 22, however, show UI and Heery officials saying corrected documentation is still needed to consider the provided records final.

One way or another, Harreld said, the UI will have the as-builts because officials need to know what’s behind the hospital walls.

“This is not about personalities,” he said. “This is about trying to run the Children’s Hospital and trying to get what we paid for in the original contract.”