Port project manager seeks dismissal of city lawsuit

Lisa Demer
Bill Roth

The project manager for the troubled and expensive Port of Anchorage redo is asking a federal judge to dismiss a lawsuit by the municipality over the flawed work, and on Thursday both sides made their arguments.

The municipality in March sued Integrated Concepts and Research Corp., or ICRC, as well as two engineering firms, PND Engineers and CH2M Hill, in Anchorage Superior Court. A month later ICRC instigated a move to U.S. District Court, where the company believes it will fare better, and defeated the municipality's efforts to transfer it back.

The city is seeking to recover millions spent on unconventional new dock sections that buckled, bent and separated, and that the city and other engineers say must be ripped out and replaced.

On Thursday, lawyers for ICRC argued to U.S. District Judge Sharon Gleason that the case should never go to trial and urged her to dismiss it outright.


ICRC was just fulfilling the terms of its contract with the U.S. Maritime Administration to manage the project and should be immune from a lawsuit, said Kurt Hamrock, a Washington, D.C.-based lawyer with the international law firm McKenna Long & Aldridge whose expertise includes government contractor defense.

The Maritime Administration, known as MARAD, had an agreement with the city to oversee the work and administer contracts. Neither MARAD nor ICRC had managed a port project before. Instead of a traditional dock on piling, ICRC recommended and MARAD approved PND's patented Open Cell Sheet Pile design, which consists of a series of U-shaped steel cells that were supposed to connect one to the next to form a new dock face.

As a federal contractor, ICRC is protected by sovereign immunity, the same as the federal government, Hamrock told Gleason. Nothing that ICRC did was outside the scope of its contract, he said. Only actions exceeding the contract provisions can be the basis for a suit, such as if a truck driver working under a federal contract crashed the truck and hurt or killed someone, Hamrock said.

"By contrast, here the allegations of negligent conduct focus on conduct and more specifically decisions that were made as part of the contract work," he said.

The claim for immunity is coming early in the case, said Gleason, who asked a series of pointed questions of both sides. Usually defendants make that claim further along in the proceedings, after the factual issues are settled, she said.

The timing is right, Hamrock said. MARAD never rejected ICRC's work, never refused to pay it and never expressed any displeasure, he said. MARAD, which is not part of the lawsuit, pushed for the PND design, he contended. (PND has defended the design, which has been used elsewhere in Alaska and around the world.)

Whether MARAD pushed for the Open Cell Sheet Pile "is a little ambiguous," Gleason said.


A lawyer for the municipality argued that ICRC's work was sorely deficient, as evidenced by "the mess we have out there today."

Bennett Greenberg, Washington, D.C.-based co-chair of construction practice for another law firm, Seyfarth Shaw, said ICRC was negligent in its duties.

Gleason pressed him on where in the lawsuit did the municipality claim that ICRC's actions were beyond the scope of its federal contract.

"Do I see anywhere in the complaint the words 'exceeded its authority?'" she asked Greenberg.

He pointed her to the findings of a federally commissioned 2012 study by CH2M Hill that confirmed the problems went beyond flawed construction to the very design.

The study found the design was such that the structure could fail in a major earthquake. And there were other problems, including ICRC directing the placement of riprap in the same area where contractors would later try to drive piles and directing subcontractors to keep trying to install the steel piles even when it was clear they weren't going in correctly, Greenberg said. ICRC fell short on quality control and inspections, he said.

"Certainly the government didn't contract with ICRC to perform their tasks in a negligent manner," he told the judge.

The arguments drew a number of other lawyers to the federal courtroom as well as officials from the Port of Anchorage. The port is an essential operation, with most of what's sold and used in Alaska passing through it. The old dock is crumbling and in danger of failing, officials have said.

A federal audit last year found the construction project costs grew fivefold between 2003 and 2011, from $211 million to $1 billion. Work essentially stalled after the troubled 2009 construction season.

The city announced last week that it had picked CH2M Hill for a five-year $30 million contract to take over management of the port construction. The city plans to separately choose a new design firm.

As of last spring, $439 million, mainly state and federal dollars, had been set aside for the project, and all but $130 million had been spent.

CH2M Hill also is being sued by the city over port design assessments performed by another company, Veco Alaska Inc., which CH2M Hill later acquired. The city says the litigation won't impact CH2M Hill's new work. CH2M Hill joined in ICRC's motion to dismiss.

Gleason said she will rule later on CH2M Hill's request.

Reach Lisa Demer at ldemer@adn.com or 257-4390.


Contact Lisa Demer at LDemer@adn.com or on