City sues 4th firm over botched Port of Anchorage expansion

The Municipality of Anchorage is suing a fourth firm in U.S. District Court over expensive problems with the beleaguered Port of Anchorage expansion project.

Last week, the municipality added GeoEngineers Inc. to a list of defendants in a lawsuit that already included Integrated Concepts and Research Corp., the project construction manager known as ICRC; PND Engineers Inc., the port designer; and CH2M Hill Alaska Inc., for work completed by Veco Alaska Inc., a company it acquired in 2007.

The municipality is blaming the four firms for failing in their roles to design, analyze and oversee the port expansion. So far, more than $300 million has been spent on the project. It's expected to cost hundreds of millions of dollars more to complete.

For years, the port expansion project has been stalled since inspections found that the still-under-construction dock to the north of the current port was already defunct.

Instead of a traditional dock-on-piling design, the municipality opted to use a design patented by PND called "Open Cell Sheet Pile." Giant hammers operated from cranes drove long sheets of steel into the Knik Arm seabed. The sheets formed U-shaped cells that were to be backfilled with dirt and gravel to create new land. But during installation a number of the steel sheets bent, twisted and jammed.

Cost estimates for the project ballooned from $211 million in 2003 to $1 billion in 2011, according to a federal audit.

The municipality has sued not only the four firms, but also the U.S. Maritime Administration, or MARAD, in efforts to recoup some of the money lost. MARAD is the federal agency initially responsible for the port expansion project.


Robert Owens, an assistant municipal attorney, has said that the municipality is seeking $340 million in damages between the two lawsuits, though he called that number "very preliminary."

In its amended complaint, the municipality says that GeoEngineers, together with PND and Veco, made up the team tasked with completing the design for the port expansion project.

A web of contracts and subcontracts link the firms together.

In 2003, the municipality agreed to let MARAD manage the project contracts and technical features, even though the agency had never overseen a port development before. MARAD contracted with ICRC to provide program management, design-build and related procurement services. ICRC and PND entered into a design contract and PND then subcontracted with GeoEngineers to provide geotechnical and design services.

Around March 2008, PND and GeoEngineers issued a report that concluded that the "Open Cell Sheet Pile" design was appropriate for the port expansion project. It deemed it "an easy-to-construct structure," according to the complaint filed by the municipality.

In July 2008, crews began driving the steel sheets into the seabed. Less than two weeks later, one of the contractors began to assert defects in the project's design. Construction halted by 2010, according to the complaint.

The complaint described the conclusions reached by ICRC, PND, GeoEngineers and Veco on the appropriateness of the design as "wrong, false and negligent."

A representative from GeoEngineers declined last week to comment on the lawsuit.

The scope of the suit could still change. In a separate court filing last week, CH2M Hill denied that it was liable to the municipality in the case of the port expansion project. The company asked for the claims against it to be dismissed and its legal fees to be reimbursed.

But the company said that if the court did find it to be liable, it asked for fault to be apportioned to other firms not listed in the lawsuit.

Specifically, CH2M Hill named Terracon Consultants Inc., an engineering services corporation contracted by ICRC to complete an independent review of the project; and Quality Asphalt Pavement and MKB Constructors, construction contractors for the expansion project. It also named MARAD and GeoEngineers.

In an order filed Nov. 5, U.S. District Judge Sharon Gleason granted the requests from CH2M Hill and the Municipality of Anchorage to file the complaints against the additional parties.

In the same order, Gleason addressed ICRC's request to depose 86-year-old Bill Sheffield, former Alaska governor and retired port director, as soon as possible. Gleason directed the parties to meet and confer on scheduling the out-of-court testimony by Sheffield.

While ICRC requested time with Sheffield before Thanksgiving, Gleason did not specify a timeline in her order.

The case over who is culpable for the failed port expansion project is scheduled to go to trial October 2015.

Tegan Hanlon

Tegan Hanlon was a reporter for the Anchorage Daily News between 2013 and 2019. She now reports for Alaska Public Media.