Skanska given $8m to walk away from Washington convention centre

Skanska received $7.8m from the Washington State Convention Center after it was dismissed from a $1.4bn expansion project, according to papers obtained by the Puget Sound Business Journal.

The two sides had been in dispute since the developer took the surprise decision to dismiss the Swedish contractor and its partner, Hunt Construction Group, from the scheme after it had been working on it for nine months.

We’ve worked with the contractor for more than six months and have determined they are not the right fit for this project– Matt Griffin, Pine Street Group managing partner

It was announced at the end of last month that the two sides had come to a settlement, but the details were not released. However, the Puget Sound Business Journal obtained the information last week after requesting it through Washington State’s Public Records Act.

Some $3.4m of the severance pay was for work that the contractors did since their appointment in June 2015. The rest of the money is for paying off workers and lawyers. Under the settlement agreement, Skanska-Hunt will pay $1.7m to subcontractors for their services.

The scheme, on which Skanska and Hunt had been carrying out pre-construction work, was to build an 11-storey addition to the state’s existing conference centre. The team’s bid was $21m, or $9.5 million less than the next lowest bid.

In March the client published a statement on its website saying it had decided to appoint a new construction team.

Matt Griffin, the managing partner of Pine Street Group, the development manager for the project, said: "We’ve worked with the contractor for more than six months and have determined they are not the right fit for this project. We will extend the schematic design process and then restart the contractor selection process to find the best fit and value for WSCC’s investment."

The dispute went to court, and a preliminary ruling was obtained that said that although the convention centre could fire Skanska-Hunt, it could not hire a new contractor until a trial had examined the issues. This left the centre with little option but to come to an agreement with its former builders.

Last week, Griffin said he was deciding between whether to recommend that the centre restart the tendering process from scratch or talk to the two teams shortlisted alongside Skanska and Hunt.

These were Mortenson and PCL, and Clark Construction and Lease Crutcher Lewis, all of them US firms.

Griffin added he thought construction would start next year and be done in 2020 as initially planned.

Image: The expanded centre is to have 1.2 million square feet of space. (LMN Architects)

Story for GCR? Get in touch via email: [email protected]

Latest articles in News