The Middlesex County Utilities Authority has agreed to pay a $5 million settlement after a decades-old suit
NEW BRUNSWICK -- The Middlesex County Utilities Authority has agreed to pay $5 million to a general contracting company in a longstanding lawsuit over a contract dispute in the construction of a waste processing facility.
Spectraserv Inc., Kearny-based firm, sued the MCUA alleging fraud, breach of contract and other claims after the construction management company's contract in the $50 million project was terminated.
The MCUA agreed to the pay the Spectraserve $4.3 million, "plus $700,000 that had been retained by the MCUA under the terms of the original construction contract," according to Anthony S. Cicatiello, a spokesman for the MCUA, in a statement Thursday.
"It's been a long road," said Marc D'Angiolillo, an attorney for Spectraserv. "I think Spectraserv has been justly compensated."
The MCUA also awarded Spectraserv a sludge transportation contract of up to 75 tons of sludge per day over the next five years for processing, Cicatiello said.
The settlement was reached as the trial a trial was underway in the case.
"Based upon all of the factors, including substantial costs which the MCUA would incur if the trial continued and potential liabilities of MCUA to Spectraserv, the MCUA determined that it was in its best interests to settle this matter," Cicatiello said.
In 1999, the MCUA entered into a contract with a company, R3M Engineering, for design and engineering work on the county's waste processing facility.
In 2003, Spectraserv was awarded an engineering contract by the MCUA to do design work for the large-scale project. Spectraserv allegedly fell behind schedule, and the MCUA terminated its contract with the company.
When the patented design did not work as expected, Spectraserv alleged that the MCUA attempted to blame the company for the deficiencies and then wrongfully terminated its contract.
At trial, attorneys for the county said that there was no evidence to support the claims of fraud or that the design deficiencies were caused by R3M Engineering and the MCUA.
In his statement, Cicatiello said "the MCUA terminated a construction contract with Spectraserv because work was not being completed within the contract time frame."
Spencer Kent may be reached at skent@njadvancemedia.com. Follow him on Twitter @SpencerMKent. Find the Find NJ.com on Facebook.