On December 12, 2006, Broward County (the "County") and Southeast Underground Utilities ("SUU") entered into an open-end contract, Bid/Contract No. N406140B2 (the "Construction Contract"), pursuant to which SUU installed fiber optic cables, conduits, and mast arms, and performed various traffic signal repairs throughout the County (the "Project"). On August 3, 2011, the County filed a lawsuit against SUU for breach of contract (the "SUU Lawsuit") after determining that SUU had overbilled the County for its work on the Project and that some of the work was defective. On June 3, 2013, the County obtained a default judgment against SUU.
On April 24, 2013, while the SUU Lawsuit was pending, SUU's president and vice president formally pled guilty to certain federal criminal charges pertaining to federal funds that the County used to pay SUU for its work on the Project. Both SUU's president and vice president were sentenced to prison terms, and SUU's president, as part of his plea agreement, agreed to a forfeiture in the amount of $3,000,000 - of which the County has, to date, received approximately $1,178,025 as restitution.
Based on damages resulting from SUU's overbilling and defective work on the Project, the County made a demand on Bond Safeguard Insurance Company ("Bond Safeguard"), the surety that issued a performance bond for the Construction Contract ("Performance Bond"). Bond Safeguard did not satisfy the County's demand or otherwise offer to compromise the County's claim on the Performance Bond. On January 10, 2014, the County filed a lawsuit against Bond Safeguard for the full amount of the Performance Bond ($2,218,494), asserting that Bond Safeguard was in default thereunder (the "Bond Safeguard Lawsuit").
The County and Bond Safeguard have agreed to settle the Bond Safeguard Lawsuit, subject to Board approval, with Bond Safeguard to make payment to the County in the amount of $375,000. The Department of Public Works, Highway Construction and Engineering Division and Traffic Engineering Division, concurs with and recommends approval of this settlement.
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