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Gerdau faces $4.8M suit over Mich. mill work

Keywords: Tags  Gerdau Special Steel North America, caster, contract, lawsuit, Irondale Industrial Contractors, Corinna Petry

CHICAGO — Irondale Industrial Contractors Inc. has filed a breach-of-contract lawsuit against Gerdau Special Steel North America, claiming it is owed more than $4.8 million in unpaid invoices, extra work and expenses incurred for work performed at the steelmaker’s Monroe, Mich., plant.

Birmingham, Ala.-based Irondale was contracted in October 2011 to perform construction services related to installation of a caster at the mill, according to documents filed Feb. 27 in U.S. District Court in Alabama.

The original contract stipulated payment of $6.53 million for construction services. Irondale and Jackson, Mich.-based Gerdau Special Steel later agreed to a change order for $365,000 in additional piping work, adjusting the contract price to $6.895 million. But the steelmaker has paid just shy of $5.97 million on the adjusted contract price, a deficiency of $926,735, according to the filing.

Irondale subsequently submitted invoices and requests for payment for construction services that it undertook pursuant to the contract, none of which Gerdau Special Steel paid, the company alleged. These include $984,789 for time extensions, $891,801 for extra work authorizations, nearly $1.1 million for other incurred expenses and $934,630 for impacts to the contract scope.

The contract requires Gerdau Special Steel, a subsidiary of Gerdau SA, to pay Irondale these sums, totaling more than $4.8 million, according to the complaint. Irondale is seeking compensatory damages and court costs.

Because the contract requires the parties to arbitrate claims, Irondale also filed a motion to stay proceedings and compel arbitration.

"We are aware of the situation and do not comment on pending litigation," Jack Finlayson, president of Gerdau Special Steel North America, said in a statement March 1.

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