Agenda 03/11/2025 Item #16K 4 (Settlement Agreement with Quality Enterprises USA Inc. for Design Build Agreement #20-7708)3/11/2025
Item # 16.K.4
ID# 2025-804
Executive Summary
Recommendation to approve a Settlement Agreement with Quality Enterprises USA, Inc., concerning Design-Build
Agreement No. 20-7708, pertaining to the incorporation of additional embankment fill material during the construction
of the Veteran’s Memorial Boulevard Extension Phase I project, and to authorize the Chair to sign the attached
settlement agreement.
OBJECTIVE: To approve the attached Settlement Agreement concerning an ongoing payment and performance related
dispute involving the incorporation of additional embankment fill material during construction work on the Veteran’s
Memorial Boulevard Extension Phase I project.
CONSIDERATIONS: On October 27, 2020 (Agenda Item 11.A), the Board approved Design-Build Agreement No.
20-7708 (the “Agreement”) with Quality Enterprise USA, Inc. (“QE”), for the Design-Build of the Veterans Memorial
Boulevard Extension Phase I (the “Project”) from Livingston Road to the Collier County Schools District’s new high
school site Aubrey Rogers High School (“ARHS”) in the guaranteed maximum price of $10,065,000.
Under the Agreement, QE was responsible for both the design & construction of the following items: enhancing
signalized intersections at Livingston Rd & Veterans Memorial Elementary, a new intersection at ARHS, widening of
existing roadway from Livingston Road to the Secoya Reserve Community, a new construction of a divided four lane
roadway connecting to the new ARHS, full length shared use paths on each side of the roadway, drainage
improvements, construction of a wet detention pond, several dry detention ponds, & preparation for the installation of a
sound wall along the Imperial Golf Club community.
Earlier this year, on April 24, 2024, the Board approved a Partial Settlement Agreement with QE (Agenda Item 16.K.8)
that resolved various claims asserted by QE and the County’s request that QE complete some remaining deficient or
repair work to finalize the construction of the Project. The Board approved an Amendment to that Partial Settlement
Agreement on January 28, 2025, to acknowledge the need for additional time to complete some of the project’s Punch
List items due to weather conditions and to allow for the release of retainage (Agenda Item 16.K.4). During the
mediation session that resulted in the original Partial Settlement Agreement, the parties were unable to resolve a separate
issue concerning a disputed claim for additional embankment fill material that was incorporated into the Project but
agreed to continue negotiating that issue in an effort to avoid future litigation.
The attached proposed Settlement Agreement addresses QE’s remaining disputed claim for additional embankment fill
material that QE contends could not have been anticipated by the design criteria provided by the County (the
“embankment claim”). As agreed upon during the earlier mediation, QE and the County met with their respective staff
and engineering consulting experts to discuss technical issues and analyze data derived from engineering modeling,
which is used to estimate the amount of embankment fill material required for the Project. During those subsequent
technical meetings, it was discovered that at the time of bid for the Project, the County provided the bidders with four
(4) cross-sections of the almost mile-long wooded area to the west of Livingston Road. The design build teams bidding
on the project relied upon those four (4) cross-sections to put together a model that would accurately depict the
quantities of embankment fill material needed for the Project. Notably, the heavily wooded area restricted a great deal
of access, so physical survey grades and shots would have been more difficult to obtain during the short period of time
required to submit a proposal for the Project versus the utilization of a modeling analysis.
At the conclusion of the Project, QE brought it to the County’s attention that the embankment elevations given in the
cross-sections didn’t accurately depict its design build team’s quantities and left QE with a shortage of embankment
material fill needed to complete the Project. QE initially asserted a claim of $1,215,867.61 for an additional 35,539
Cubic Yards of embankment fill material (the actual additional amount incorporated into the Project) and 5,265 Cubic
Yards of excavation. The County discussed this claim with its engineering consultant, RWA, Inc., which was also the
firm that provided the original cross-sections, to review QE’s findings and make its own model using the same cross-
sections given at bid. The RWA model showed an additional 11,960 CY of embankment. If QE was using the same
model trajectory, then it would have needed the additional 11,960 CY of material to reach the desired elevation in their
model too.
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3/11/2025
Item # 16.K.4
ID# 2025-804
Although the use of modeling is an accepted professional standard in the engineering industry, there can be variances
(sometimes substantial) in the outcome based on the criteria that is provided in the model (including adding additional
cross-sections throughout the length of a project), as well as the type/software model used by the parties. Following
further conversations with QE and sharing the results of RWA’s further modeling, QE agreed to withdraw its claim for
35,539 of embankment fill material and accept RWA’s analysis, providing for an additional 11,960 of embankment fill
material. Using the embankment fill material pay item amount of $31.99 that the Parties previously negotiated in
Change Order No. 1, the County negotiated with QE to reach a total recommended settlement amount of $382,600.40
(11,960 CY x $31.99).
QE and the County are currently under contract for numerous construction projects. Generally, when payment and
work-related disputes arise during the course of a project, the parties are able to informally resolve such issues. In this
instance, the Parties exhausted all informal efforts before engaging in mediation in an effort to avoid litigation and reach
a compromise as to all asserted claims. The technical issues concerning modeling would present a difficult matter for a
jury to decipher if the Parties were unable to reach an agreement to settle. In this instance, the proposed settlement of
$382,600.40 represents a reduction in the amount of $833,267.21 from QE’s original asserted claim of $1,215,867.61.
Finally, the construction of the Project has since been concluded and accepted to the satisfaction of the County.
FISCAL IMPACT: Funds in the amount of $382,600 are required for this settlement. The primary source of funding
for the settlement is road impact fees. Should impact fees not be sufficient, the secondary source will be gas taxes.
GROWTH MANAGEMENT IMPACT: There is no impact to the Growth Management Plan related to this action.
LEGAL CONSIDERATIONS: This Settlement Agreement has been reviewed and approved by the Collier County
Manager’s Office and the County Attorney’s Office. The proposed settlement reduces the risk of incurring significant
additional costs if the dispute proceeded to trial on the remaining claim for additional embankment fill material
incorporated into the Project. The settlement of $382,600.40 represents a reduction in the amount of $833,267.21 from
QE’s original asserted claim of $1,215,867.61. The proposed settlement is reasonable based on the totality of the
circumstances, including the risks involved in future litigation and the technical issues that would necessarily be
considered if such a case proceeded as a jury trial. This item is approved as to form and legality and requires majority
vote for Board approval. —SRT
RECOMMENDATIONS: That the Board approve the attached Settlement Agreement with Quality Enterprises USA,
Inc. concerning Design-Build Agreement No. 20-7708 pertaining to the construction of the Veterans Memorial
Boulevard Extension Phase I project, and authorize the Chair to sign the attached settlement agreement.
PREPARED BY: Matt Thomas, P.E.
ATTACHMENTS:
1. Settlement Agreement 02.25.25 Final srt
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