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Tollway settles lawsuit over contract blunder that stalled major interchange

After months of construction delays on a massive interchange project, Illinois tollway board directors Thursday approved a nearly $25 million settlement to a lawsuit filed by a contractor.

Tollway leaders also acknowledged that the agency made an administrative error when it awarded a $323 million contract to New York-based Judlau Construction in 2023 to repair the I-290/I-88 interchange.

As a result, officials canceled the contract in May without any explanation to Judlau. The firm promptly sued for breach of contract, noting it had already hired workers, bought materials and was actively excavating and grading.

About $15 million of the settlement covers actual construction costs incurred by Judlau, and $10 million is related to damages. The tollway board also agreed to pay Judlau’s subcontractors $6.5 million for construction work performed on the interchange.

The contract was “canceled because a relatively new provision in state law that provides a bid preference for companies based in Illinois was inadvertently excluded from the original contract bid evaluation,” tollway officials said in a statement.

The provision requires a 4% preference, or reduction, to Illinois companies bidding for construction work.

“If the bid preference had been applied, the contract would have been awarded to Walsh Construction Co.,” the agency said. Walsh is based in Chicago, according to the company’s website.

“The agreement will eliminate legal barriers and enable the tollway to proceed with the project. In addition, it resolves time-consuming and costly litigation,” the tollway’s statement reads.

Judlau executives said the firm is “satisfied with the settlement and notes that the tollway did not terminate the contract as a result of any performance issues on the part of Judlau.”

In its lawsuit, Judlau contended that terminating the contract “negatively impacts nearly 160 subcontractors and vendors and will substantially delay the project at the expense of 300,000 motorists daily while the work already in progress remains halted.”

Asked if the tollway had taken action to prevent any repeats of the mistake, officials said the “application of the Illinois bid preference has been incorporated into the tollway’s construction bid evaluation process.

“And that includes a review by the procurement analyst and a check by a senior manager,” spokeswoman Joelle McGinnis said.

A status hearing on the lawsuit is scheduled for Sept. 5 in DuPage County court.

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