Judge keeps subcontractors in port lawsuit
Subcontractors are still potentially liable for work done years ago on the disastrous Port of Anchorage expansion project, according to a federal court ruling.
U.S. District Court of Alaska Judge Sharon Gleason ruled Jan. 13 that Quality Asphalt Paving Inc. and MKB Constructors, its working partner on the Anchorage port project in the late 2000s, are still subject to a lawsuit filed by the Municipality of Anchorage because the city never knowingly reconciled with the companies.
Quality Asphalt Paving, or QAP, joined by MKB, filed a motion for summary judgment in the suit in August, claiming a September 2012 settlement for $11.1 million between the U.S. Maritime Administration, as the port project manager, and the subcontractors released them from liability.
Gleason wrote in her Jan. 13 order denying the judgment motion that court records indicate the Maritime Administration, or MARAD, attempted to reassure the municipality shortly after the 2012 settlement that it did “not preclude (the municipality) from pursuing its own litigation.”
An Oct. 19, 2012, letter from then Anchorage Mayor Dan Sullivan to MARAD Administrator David Matsuda supports the municipality’s contention that it was unaware of the settlement and further found the federal agency to be a weak negotiator, settling for $11.1 million when the agency found $11.5 million of a $17 million claim to be valid.
Sullivan wrote that he was “surprised and disappointed” to learn MARAD settled a contract dispute with Integrated Concepts and Research Corp. on behalf its contractors QAP and MKB regarding the Port of Anchorage Intermodal Expansion Project.
MARAD hired ICRC, a former subsidiary of the Kodiak-area Alaska Native corporation Koniag Inc., early in the project to act as its on-the-ground prime contractor.
“When pressed whether ICRC (and subsequently its contractors) had been released from further claims, particularly claims that might be asserted by the Municipality of Anchorage, MARAD only made vague and general comments,” Sullivan wrote. “When further pressed as to whether funds of the municipality were used to settle the matter, MARAD pretended not to know the answer, although the clear implication was that the funds provided by the municipality were used without our knowledge or consent.”
MARAD, a federal Transportation agency, was brought into the project in 2003 by the municipality to manage construction and be a vessel to acquire federal funding.
Originally intended to update and expand the Port of Anchorage’s aging docks, the project was fraught with control and communication issues nearly from its outset. Those issues were manifested in construction problems and led to work being stopped partway through in 2010, which was never resumed.
In all, the municipality spent roughly $302 million of state, federal and its money for virtually nothing.
The Municipality of Anchorage originally filed suit in March 2013 against ICRC, dock designer PND Engineers Inc. and CH2M, which now owns a former project consultant.
Anchorage filed a separate suit against MARAD in Federal Claims Court in February 2014 seeking to recover damages for the project. An August 2013 Inspector General report was deeply critical of MARAD for its handling of the Anchorage port project and other similar work in Hawaii and Guam.
PND has long contended the construction problems associated with its patented Open Cell Sheet Pile dock were due to inexperienced contractors, not a faulty design, as the municipality and a study commissioned by the city conclude.
PND filed a third-party suit against QAP and MKB, bringing the subcontractors into the tangled legal mess.
Elwood Brehmer can be reached at [email protected].