MOA sues contractors over port construction


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On the same day the Anchorage Assembly was presented with construction options for the Port of Anchorage expansion project, the Municipality of Anchorage filed a formal complaint in state court against three firms hired to work on the now suspended project.

The municipality filed a lawsuit March 8 seeking damages “in excess of $100,000” from Integrated Concepts and Research Corp., PND Engineers, Inc. and CH2M Hill, according to court documents. Exact damage amounts will be determined as the case continues.

CH2M Hill is named in the suit because it purchased VECO Alaska Inc. in 2007, an Anchorage-based construction and engineering firm.

CH2M Hill conducted a study that proposed several design alternatives for the port that was presented to the assembly March 8. CH2M Hill also had a contract with the municipality to determine the suitability of current design plans and the quality of construction work already done at the port. Combined, the two CH2M Hill contracts are worth more than $2.2 million.

The suitability study found flaws in both the installation and design of new port infrastructure.

To date, the State of Alaska has approved $219 million in bond money and direct appropriations to the project. Federal funds obligated to the port total more than $138 million and the port itself has contributed $80 million to bring the funding total to $439 million.

Prior to the CH2M Hill purchase, VECO was hired as a subcontractor by PND to review the suitability of PND’s Open Cell Sheet Pile foundation design at the center of the construction controversy.

Integrated Concepts and Research Corp., or ICRC, was hired by the U.S Maritime Administration, or MARAD, formerly the lead project oversight organization, to contract and monitor port construction work in early 2004.

In previous interviews Anchorage Mayor Dan Sullivan has said lack of “guidance and direction” from the Maritime Administration — which chose not to have an individual in Anchorage tasked with monitoring the work — contributed to the construction problems.

The Municipality of Anchorage assumed control of the project in late 2011. Construction work at the port is currently suspended and it’s unknown when it will resume.

The suit alleges ICRC breached its contract with MARAD, of which the municipality was a direct beneficiary. It also alleges two counts of negligence against ICRC, claiming it failed to “perform its duties with the requisite degree of care that a reasonably prudent, skilled and qualified professional would exercise under the circumstances.”

The municipality places responsibility with ICRC for property damaged and deemed unusable at the port. It claims a “completely different design and construction method” will be needed.

The municipality claims two counts of negligence against PND for alleged flaws in the design and installation of its sheet pile system at the port causing the municipality to “incur costs investigating and attempting to repair the damage” it claims PND is responsible for.

According to the suit, VECO, now CH2M Hill, is accused of one count of negligence for lack of care in its design services. VECO’s work for ICRC included geological tests of the Port of Anchorage and determining the suitability of PND’s Open Cell Sheet Pile system for use in the project.

The municipality’s complaint quotes VECO’s report, which states that the sheet pile system meets the seismic and operational standards needed at the port. CH2M Hill’s most recent suitability study directly disputes that claim.

Sheet piles as long as 90 feet were used in construction at the north end of the port.

The lawsuit states that, “PND’s own literature explains that sheet lengths exceeding 24 meters (78 feet) exceed the ‘practical limit’ of Open Cell Sheet Pile construction.”

The suit claims that $30 million paid to subcontractors in 2010 to remove and replace sheet piles damaged during the 2008 and 2009 seasons “demonstrates convincingly that ICRC and PND vastly underestimated and misrepresented the costs, ease and feasibility of using the Open Cell Sheet Pile system on this project.”

Another complaint against ICRC includes its approval of the use of “armor rock” to mitigate tidal erosion in areas where fill soils were added.

According to the document, tidal movement had displaced the rock within months of its placement during the 2007 construction season. It claims ICRC was aware the rock had shifted out of its intended use area and into the area where sheet pile was subsequently driven but did nothing to correct the issue. These claims are supported by 2008 bids awarded to the subcontractors tasked with installing the sheet piles in the contested areas, the document states.

ICRC is additionally alleged to have denied knowledge of the armor rock, the suit claims, despite having approved its placement.

During the 2008 season, ICRC’s subcontracting company hired to install the sheet pile recognized design flaws and noted related construction and safety issues and “threatened to walk off the project” if the design was not adjusted, according to the court document.

While the issues were addressed, the municipality claims action was not taken before it impacted both the budget and timeline of the project. The suit places responsibility for these problems with PND and ICRC.

At the time more than $112 million had been allocated to the project.

According to the suit, armor rock placement and further errors in adapting the sheet pile system to the project caused sheet pile installation challenges that led to multiple work-safety incidents during the 2008 season.

ICRC’s project contract expired in May 2012 and was not renewed.

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

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