Anchorage port contractor claims no liability in failed project

  • Liability for the failed installation of the sheet pilings seen here at the Port of Anchorage are at the center of multiple lawsuits as the Municipality of Anchorage seeks to recoup money spent on the expansion project that’s been stalled since 2010. Photo/Elwood Brehmer/AJOC

A key subcontractor in Anchorage’s failed port expansion project wants out of a lawsuit first filed by the Municipality of Anchorage because it claims the city has no jurisdiction to recover lost money.

Attorneys for Quality Asphalt and Paving, the contractor that led construction work at the Port of Anchorage in the late 2000s, argued in U.S. District Court of Alaska Nov. 20 that QAP already settled claims related to the project with Integrated Concepts and Research Corp., or ICRC.

ICRC managed the project to update and expand dock and shore side facilities at Anchorage’s aging port on behalf of the U.S. Maritime Administration, or MARAD, a federal Department of Transportation agency commissioned by the municipality to oversee the project.

The Port of Anchorage Intermodal Expansion Project began in 2003 as a $210 million endeavor, but problems installing the patented open cell sheet pile system chosen to build the docks exploded project costs over time. 

Construction work at the port ceased in 2010. Ultimately MARAD spent $302 million of the money Anchorage, the State of Alaska and the federal government contributed to the project. 

The city has about $130 million remaining from $439 million appropriated for the work and has begun a scaled back plan known as the Anchorage Port Modernization Project.

QAP attorney Michael Geraghty said during the Nov. 20 hearing that a 2012 settlement in which MARAD paid ICRC $11.3 million for QAP’s and MKB’s work released the contractors’ claims and effectively ended their ties to the project. The municipality has said it was not party to the settlement and was even unaware of it at the time it was reached.

Attorneys for the municipality have said Anchorage is looking to recoup more than $300 million in two outstanding lawsuits, one initially filed in 2013 against ICRC, project designer PND Engineers Inc. and CH2M, which purchased project consultant VECO Alaska, and another suit filed last year against MARAD in Federal Claims Court.

By partnering with MARAD to execute the project on behalf of Anchorage, the municipality subjected itself to federal contracting guidelines that place responsibility for delivery with MARAD, Geraghty argued. 

“You’re letting someone else decide if that work is acceptable for your benefit,” in the federal contracting process, he said.

Geraghty also noted it should not be lost that the municipality has not submitted claims against QAP; rather, PND filed a third-party suit against the subcontractors.

PND has long claimed the problems with the disastrous project come down to shoddy installation of its proprietary sheet pile design, not its suitability for the site.

QAP and MKB are still waiting for PND to clarify its case against the contractors. The subcontractors contend the problems were issues of engineering and constructability and those responsibilities fall on the owner of the project, the municipality.

QAP filed a motion for summary judgment in the case in August — the motion argued Nov. 20.

Geraghty furthered his point by noting what he considers a simple conflict in the municipality’s stance; Anchorage is attempting to recover the same damages through its separate lawsuits against MARAD and the private project participants.

Municipal counsel Donald Featherstun said that there are many material facts in dispute yet in this case; summary judgment can only be rendered when the facts are not in dispute and the only questions are interpretations of the laws at issue. 

“The arena of government contracts is enormously complicated,” Featherstun said.

He also contended that if QAP is allowed to walk away as a subcontractor without potential liability, the viability municipality’s case against the rest of the defendants goes too.

Featherstun emphasized the point that the municipality was kept in the dark regarding 2012 settlement between MARAD and ICRC.

“In effect, they were all hiding from (the municipality),” he said.

Geraghty rebutted by asking why the municipality would sue MARAD and at the same time claim that MARAD released itself from claims through the settlement.

Claiming a need to sort out federal contracting complexities as a reason for QAP to continue in the case is “a deliberate attempt to sandbag the court,” Geraghty said.

A trial in the suit first against ICRC, PND and CH2M was once set for October of this year, but is now scheduled for September 2016.

Elwood Brehmer can be reached at elwood.brehmer@alaskajournal.com.

Updated: 
11/24/2015 - 2:43pm

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