Alabama Withholds $14.2 Million From Prison Contractor
The state is penalizing Caddell Construction for failing to meet the October 15 completion deadline for a new prison.
Updated on Oct. 16, 2026 in Criminal Justice
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The Alabama Department of Corrections is collecting $14.2 million in liquidated damages after Caddell Construction missed the final deadline for the Governor Kay Ivey Correctional Complex. The project remains unfinished despite its $1.25 billion guaranteed maximum price tag.
Why it matters
The delay marks a significant setback for the construction of the state's largest prison, which is intended to address capacity issues. Alabama officials are enforcing contract terms to recover costs as the project timeline continues to slip.
The state has withheld $14.2 million in payments from Caddell Construction to cover liquidated damages. An additional $7.1 million in damages will be assessed on November 16, 2026, if construction remains incomplete.
The players
Caddell Construction
This Montgomery-based firm is the primary contractor responsible for the design and build of the state's new correctional facility.
Alabama Department of Corrections
This state agency oversees the operation and construction of correctional facilities throughout Alabama.
Governor Kay Ivey Correctional Complex
Named after the state's current governor, this facility is intended to be the largest prison in Alabama upon completion.
The details
The Governor Kay Ivey Correctional Complex, which is currently 85% complete, is designed to house 4,000 beds. Caddell Construction remains obligated under the original design-build agreement to finish the project at the agreed-upon maximum price.
Timeline
The project completion deadline was originally set for May 2026.
The state flagged concerns regarding the project timeline in July 2026.
The contractor missed the final completion deadline on October 15, 2026.
An additional $7.1 million in damages is due on November 16, 2026, if the project is not finished.
Legal Context
This project represents the first major state prison construction initiative in Alabama in 30 years. It follows a pattern of state efforts to address federal and internal mandates regarding prison overcrowding and facility conditions.
The delay affects the state's ability to modernize its prison infrastructure and address long-standing capacity requirements. Local residents may see continued budgetary scrutiny as the state manages these ongoing construction costs.
The takeaway
Large-scale state infrastructure projects often face significant financial penalties when deadlines are missed. Taxpayers should continue to monitor the progress of this facility as further delays could result in additional fiscal impacts.
What happens next
If the project is not completed by November 16, 2026, the state will impose an additional $7.1 million in liquidated damages against the contractor.
Further reading
For more background on state oversight, visit the Alabama Criminal Justice section.
Source note: This article includes information reported by Yellowhammer News.
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