FARGO – Contractors are expected to pay the city of Fargo nearly $750,000 in penalties for running late this year on construction projects worth $30.3 million.
The contractors can appeal the fines – and probably will – but for now, Master Construction of Fargo, the contractor on the 19th Avenue North project and other work, owes the most with $290,900. That comes to about 2.5 percent of the company’s $11.3 million contract with the city.
Construction holdups have caused plenty of consternation lately, with delays on 19th Avenue North hurting area businesses and getting the attention of city officials. In October, City Commissioner Dave Piepkorn invited those frustrated by the project to come express their discontent at a City Commission meeting.
In total, contractors asked for at least 1,399 days of extensions this year and most were approved.
The delays prompted the City Commission to recently make its penalties stiffer in light of a report that found the city’s fine levels were low compared to those used by the departments of transportation in North Dakota and Minnesota.
“We updated those values and raised them,” said City Engineer April Walker, who presented the fine totals to the City Commission on Monday at commissioners’ request.
Walker said the $176,000 in penalties accrued by ICS of Grand Forks for running late on a floodwall project was probably the largest fine for any single project. It was 5.65 percent of its $3.1 million contract.
“We do expect them to appeal,” Walker added.
The fines, known as liquidated damages, are imposed to punish contractors for failing to meet agreed-upon construction deadlines without a valid reason, Walker said. The contractors can appeal the penalties by successfully arguing that delays were caused by factors outside of their control.
JR Ferche, KPH, R&R Excavating, Northern Improvement and RL Larson also owe thousands in penalties for being late on construction projects this year. The city is set to receive $742,900 in penalties on contracts.