Aug 26, 2022 - News

Project Labor Agreements ban results in Iowa government headaches

Illustration of a hundred dollar bill with Ben Franklin wearing a construction hat.

Shoshana Gordon/Axios

A contractor that faces tens of thousands of dollars in late penalties from the city of Des Moines is the subject of more than $1.7 million in lawsuits linked with its work on at least eight Iowa government projects, court records reviewed by Axios show.

Why it matters: The situation is an example of how contractors are sometimes hired by governments despite concerns with their work.

  • It’s a result of a 2017 state law that narrowed the ability of governments to review a bidder’s qualifications.

Flashback: The 2017 law is linked with a successful effort by Republicans to block governments from mandating Project Labor Agreements, which they contend promotes more fair and open competition among contractors who do not use union labor.

  • Democrats warned that the bill was an attack on local governments and would result in taxpayer waste.

Zoom in: Graphite Construction Group of DSM — formerly known as the Rochon Corporation — was the lowest bidder and hired last year for a $560K project at Witmer Park despite concerns about its past work.

  • The city’s legal team advised City Council members not to consider its track record in some of the other projects due to the 2017 law.

What’s happening: The Witmer project is almost three months overdue with daily penalties of $500.

In another case: Metro Concrete, a former Dallas Center business that worked as a subcontractor, alleges Graphite’s actions forced it into bankruptcy.

  • A bankruptcy trustee seeks more than $900,000 in pay or damages linked with work on an Atlantic Schools athletic facility, the DSM fire station, a DMACC renovation and a state vehicle maintenance building.

Of note: Graphite was the lowest bidder for Atlantic’s project but completion was delayed for months.

  • The district will not hire the company again, Superintendent Steve Barber told Axios this month.

And in more cases: Central Iowa Ready Mix alleges Graphite owes it almost $426,000 in labor and materials for work on a Metro Waste Authority project.

  • Blackford Foundations of Ankeny seeks $411,000 from Graphite for breach of contracts linked with projects at Mytrue Medical Center in Harlan, Southeast Polk Schools and Witmer park.

What they're saying: Changes made to projects after Graphite was hired as well as pandemic-related delays and deficiencies among subcontractors are to blame for the delays at projects, Graphite’s president Russell Carew told Axios.

  • He declined to comment about the specific allegations in the ongoing lawsuits.

The big picture: Problems linked with the 2017 law are not common but there are "a few bad actors," Alan Kemp, director of the Iowa Leagues of Cities tells Axios.

  • Local governments can better protect themselves with clear contracts that include penalizations for being late, he said.

Get more local stories in your inbox with Axios Des Moines.


Support local journalism by becoming a member.

Learn more

More Des Moines stories

No stories could be found

Des Moinespostcard

Get a free daily digest of the most important news in your backyard with Axios Des Moines.


Support local journalism by becoming a member.

Learn more