MARAD ordered to hand over port study
Federal Claims Court Judge Edward Damich didn’t take long to rule that the U.S. Maritime Administration must produce a previously proprietary report on the failings of the former Port of Anchorage Intermodal Expansion Project.
Damich ruled Aug. 23, just two days after arguments on the matter, that a root cause analysis engineering report done in 2012 by the international consulting and management firm AECOM will become part of the court record in the Municipality of Anchorage’s lawsuit against the federal agency commonly known as MARAD.
Justice Department attorney Jeffrey Regner argued on behalf of MARAD in an Aug. 21 telephonic hearing that the report was commissioned by MARAD’s legal office in September 2011 to, as its name implies, uncover the underlying issues as to why the construction project went awry.
The facility is the entry point for the vast majority of goods that are dispersed throughout Alaska. It was renamed the Port of Alaska after an October 2017 vote by the Anchorage Assembly and is owned by the municipality.
Anchorage officials in 2003 signed an agreement for MARAD to oversee the project as a way to direct federal funding to the project; the port is also designated as a national strategic defense facility. MARAD, in turn, hired Integrated Concepts and Research Corp. to manage the project.
ICRC settled a separate lawsuit with the municipality in January 2017 for $3.75 million, one of seven settlements totaling $19 million with design and construction contractors in the project.
MARAD paid ICRC $11.3 million in project funds as part of a September 2012 settlement to a Civilian Board of Contract Appeals complaint the company filed against the federal agency.
Anchorage attorneys claim MARAD purposefully settled the dispute with ICRC secretly and without the municipality’s knowledge, while federal attorneys say city officials were made aware of the deal within days after it was reached.
Judge Damich agreed with municipal attorneys who argued that the AECOM report is likely the only place to find specific information on the project’s problems.
Damich said during arguments that there is no indication in the court record that MARAD told the municipality it was preparing to settle the contract case.
“(T)hat the case was settled without the knowledge of Anchorage leads the Court to conclude that Anchorage’s argument regarding ‘evasion’ are compelling enough to hold that Anchorage has a substantial need to review AECOM’s work-product to understand what prompted MARAD to settle ‘surreptitiously’ with ICRC without first consulting Anchorage as Anchorage asserts MARAD was required to do pursuant to the 2011 Agreement (between Anchorage and MARAD),” he wrote in the eight-page order. “Furthermore, Anchorage has a substantial need to obtain testimony and documents from AECOM because of AECOM’s unique position in the project.”
Damich continued to state that MARAD and AECOM are the “gatekeepers” of information that could help the city understand what motivated the agency to settle with ICRC.
Damich additionally granted the municipality’s motion to subpoena AECOM principal Brad Erickson, noting in his order that MARAD “has not provided any argument regarding its opposition to the deposition, only that it titles its motion ‘Motion to Quash the Subpoena of Brad Erickson,’ without more, the Court permits the deposition.”
MARAD has 14 days from the issuance of the order to produce the report.
Work stopped on the port reconstruction in 2010 after extensive damage to the sheet pile dock structure that was being installed was discovered. Roughly $300 million in public money was spent on the project that yielded little; most of the sheet pile has been removed.
A construction worker was killed at the port in 2011 when the ground beneath the bulldozer he was operating collapsed, causing the bulldozer to fall into the water and trap him as he tried to escape, according to news reports of the accident. The worker was employed by a subcontractor hired to stabilize the damaged sheet pile dock structure while project officials determined a path forward.
Port leaders are now moving forward with a scaled-back modernization of the corroding dock infrastructure, some of which is approaching 60 years old.
The municipality sued MARAD in February 2014 in federal contract court, a lawsuit with four years of discovery that has progressed slowly as the private-party suit was ongoing. It is seeking up to $370 million from the federal government in the suit, according court documents.
MARAD was also blasted for its alleged inattention to managing the Anchorage project as well as other Pacific port projects in an August 2014 Inspector General report.
Regner contended the root cause analysis was done strictly for MARAD’s internal legal use, was left in draft form and was paid for with agency funds and not port project funds, making it a privileged document.
He said further that it was compiled at the same time and largely with the same information that can be found in a public CH2M (formerly CH2M Hill) suitability study to determine whether or not the patented Open Cell Sheet Pile dock design was appropriate for the unique seismic conditions at the Anchorage port.
CH2M’s study concluded that the design and construction in the project were both problematic and led in large part to the municipality suing the contractors in 2013.
During the roughly four years of discovery in the case MARAD has produced approximately 360,000 documents consisting of over 2.3 million pages, according to Damich. The sides have also taken 28 depositions, with another 30 expected in addition to an unknown tally of expert depositions.
Discovery is set to conclude in March 2019, although a trial schedule has not been set.
Elwood Brehmer can be reached at [email protected].