IOWA CITY — The University of Iowa has been ordered to pay a Cedar Rapids contractor nearly $21.5 million following a yearslong legal battle over its work on the new Stead Family Children’s Hospital and Hancher Auditorium. Documents made public this week show an arbitration panel issued the final award March 5 in Modern Piping Inc.’s favor, noting the contractor “incurred substantial expense in performing additional work for which Iowa was clearly responsible to pay.” More than $4.6 million of the award relates to the UI’s project of building a new Hancher after the original was damaged in the 2008 floods.Should the total amount stand, it would further balloon the $360 million price tag on the Children’s Hospital.That cost far exceeded the project’s original $270.8 million budget due in part to the UI’s ill-advised choice for project delivery and contracting strategy, according to a 2015 internal audit reviewed by The Gazette.The university is fighting the award while its health care operation struggles to cut costs and increase revenue after reporting a $7.2 million budget deficit last year, and as the UI faces millions in budget cuts over the next three months.Iowa Assistant Attorney General George Carroll argued earlier this month that the awards are unlawful because the UI never agreed to arbitrate the Children’s Hospital disputes.“The panel had no authority to proceed,” according to the UI motion.

Sections:  u.s.   
Topics:  Iowa   Linn County   Cedar Rapids   
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