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Northern Beef construction manager says contract for building was ‘open-ended’

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Northern Beef construction manager says contract for building was ‘open-ended’
Mitchell South Dakota 120 South Lawler 57301

PIERRE — Bob Breukelman, the man who oversaw construction of Northern Beef Packers at Aberdeen, began testimony Wednesday in day two of a trial in federal bankruptcy court over a claim that a contractor is still owed $2.1 million.

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Breukelman said he approached Scott Olson Digging Inc., of Huron, after three “reputable” Aberdeen contractors “colluded” by submitting a joint bid in 2006 to perform the dirt work on the 19 acres that were to be disturbed.

Northern Beef shut down last summer after less than one year of operation and declared bankruptcy.

The White Oak investment group based in San Francisco purchased the property in federal bankruptcy court. The plant remains closed.

During the initial phase of the project eight years ago, a pre-bid conference was held with Lien Transportation, Dahme Construction and Jacobs Construction for the land preparation work prior to construction, according to Breukelman.

He said they returned with a single bid.

“Past experience, we did not feel comfortable,” Breukelman said.

Wanting a comparison, Breukelman — who’s from Huron — said he contacted Scott Olson at Olson’s office in Huron.

Within seven to 10 days, Olson proposed a contract to Dennis Hellwig, the Aberdeen livestock market owner and the founder of the packing project, according to Breukelman.

Breukelman said Wednesday he wasn’t involved in development of the contract and didn’t see it before Olson presented it to Hellwig.

During his testimony, Breukelman was about 10 feet away from Olson in the courtroom.

Hellwig accepted Olson’s bid and wrote a check for $75,000 to Olson as earnest money to begin staging crews and equipment for the project, according to Hellwig’s testimony Tuesday.

The contract was dated Oct. 20, 2006. Hellwig said Northern Beef has already paid $3.1 million to $3.2 million to Scott Olson Digging.

The three Aberdeen contractors hadn’t been told a firm no yet on their joint bid.

“We didn’t reject it at the time. We told them we’d come back at a later date,” Breukelman said.

He said the contract was “a little open-ended” because of some points that weren’t covered.

Breukelman said Olson based his contract on figures developed by the three Aberdeen contractors.

Breukelman is scheduled to continue his testimony today as the Northern Beef lawyers fi nish presenting their case.

Among their other witnesses today will be Francis Brink, the retired Aberdeen city engineer who did the initial survey work and the site preparation plan.

Scott Olson Digging’s lawyers will present some witnesses this afternoon as time allows and will continue making their case Friday.

Federal bankruptcy Judge Charles Nail Jr. said he’s aiming for the trial’s conclusion by mid-afternoon Friday.

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