Alaska News

Anchorage sues federal Maritime Administration over troubled port expansion

Anchorage is suing the U.S. Maritime Administration over the city's bungled port expansion project, Mayor Dan Sullivan announced Monday.

In a complaint filed in federal court last week, the city alleges that MARAD failed to properly supervise construction at the port in its role overseeing the work and administering contracts.

The agency had never managed a port construction before it signed on to do so in 2003, and the city says that MARAD's inadequate oversight of the Anchorage project resulted in hundreds of millions of dollars being spent, for which the city "received virtually nothing in return," according to the complaint.

The expansion work at the port has essentially been at a standstill since the 2009 construction season, after problems cropped up with an unconventional design for a new dock. Part of the project will have to be torn down.

Anchorage is already suing a project management firm hired by MARAD, as well as two engineering firms.

But Sullivan, a fiscally conservative Republican who is running for statewide office, said that by filing a separate suit against MARAD, the city wants to ensure that all the parties involved in the expansion are held accountable.

"We're including all of them because we believe there's liability with each of their actions," Sullivan said at a news conference Monday. "It's our goal to hold everyone accountable for their role in the management, or the direct construction itself."


A MARAD spokeswoman did not immediately respond to a request for comment Monday.

The city's complaint says Anchorage suffered at least $10,000 in damages--the minimum threshold required for the case to be heard by the federal claims court where the suit was filed, Sullivan said.

Sullivan declined to specify how much the city was seeking, but it's likely to be millions of dollars, given the city's $1.75 million contract with the litigation firm that's handling the lawsuits against MARAD, and against the engineering and project management firms.

"It's huge," said Municipal Attorney Dennis Wheeler.

The city's complaint cites several examples of what it claims was MARAD's inadequate oversight of the expansion work.

The agency didn't take any action when contractors started running into problems with the driving of piles that were supposed to be part of the new dock, the complaint says.

And it didn't force the project management firm to get the contractors to fix their defective work, according to the complaint--and in fact, it says that MARAD secretly paid the project manager $11 million of Anchorage's money to settle a claim brought by the project management firm on behalf of the contractors, which the city only learned about after it submitted a request under the Freedom of Information Act.

The port project remains stalled while the city finalizes a contract with a new project management firm, CH2M Hill.

CH2M Hill is actually one of the two engineering firms being sued by the city over the problems with the port expansion, due to work performed by a company that CH2M Hill later acquired. But the city says that the suit won't affect its work with CH2M Hill going forward.

Before construction resumes, a new design for the expansion must still be selected. Sullivan has previously said he doesn't expect work to start again until 2016.

As of last spring, nearly $440 million had been earmarked for the project--mostly state and federal money--and all but $130 million has been spent.

Reach Nathaniel Herz at or 257-4311.


Nathaniel Herz

Anchorage-based independent journalist Nathaniel Herz has been a reporter in Alaska for nearly a decade, with stints at the Anchorage Daily News and Alaska Public Media. Read his newsletter, Northern Journal, at