Mortenson locked in $15M change order dispute with Vikings stadium authority

Dive Brief:

A $15 million change order dispute between the Minnesota Sports Facilities Authority (MSFA) and Mortenson Construction could be headed to binding arbitration if the two parties can’t work out a deal over who should pay for a portion of extra work on the $1.1 billion Vikings U.S. Bank Stadium, the Star Tribune reported.
The MSFA and Mortenson started mediation last week, and the Tribune reported the talks could last several weeks. The two parties unsuccessfully negotiated for a year before Mortenson filed for mediation in August.
Mortenson maintains that it is due the extra money for design changes on the stadium, but the MSFA said Mortenson should have anticipated the changes and incorporated them into its original bid.

Dive Insight:

"Mediation is underway and will continue for at least the next month. All parties remain committed to the process and continue to be engaged," MSFA Chair Michele Kelm-Helgen said in a statement.

The disagreement is not just confined to the negotiation room. Last summer, Mortenson, out of its own pocket, paid two subcontractors who did work related to the disputed changes after the two wrote letters to the MSFA saying they would face bankruptcy unless the MSFA and Mortenson settled their dispute.

The public conflict is uncommon for Mortenson, which has a history of settling its disputes privately, according to the Tribune.

Despite the dispute between Mortenson and the MSFA, the two organizations announced last month the project had reached the minority hiring goals set by the state of Minnesota. In October, with nearly 1,400 workers on the site two years after breaking ground, 37% of the workforce were minority workers — beating the 32% goal — and 9% were women — surpassing the 6% goal.

The stadium is the largest public-private venture in Minnesota history, with Vikings owners Mark and Zygi Wilf and state taxpayers splitting the bill. The venue is set to open for the 2016 NFL season.

Mortenson is a major player in the stadium construction business. Last month, the Golden State Warriors NBA franchise announced it had selected the joint venture of Mortenson and Clark Construction to build its new $1 billion, 18,000-seat arena. The contractor also built the Xcel Energy Center for the Minnesota Wild NHL team, the Target Center for the Minnesota Timberwolves NBA team, and Target Field for the Minnesota Twins MLB team.