Alaska News

City sues three firms over Anchorage port design, oversight

JUNEAU -- In a new lawsuit, the Municipality of Anchorage is blaming expensive and complex problems with the Port of Anchorage expansion directly on the engineers that designed it and the firm hired to manage the project.

Three companies all failed in their roles in designing, analyzing or overseeing the beleaguered, long-stalled project, the city says in a lawsuit filed March 8 in Anchorage Superior Court.

The suit faults 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 in its prior incarnation, Veco Alaska Inc., analyzing PND's design for stability.

The city is asking for an unspecified amount in damages from each of the companies. More than $300 million has been spent on the project so far, with hundreds of millions more estimated to finish it.

Efforts to reach ICRC and CH2M Hill were unsuccessful Friday afternoon. PND president John Pickering, reached on his cellphone, said he didn't know the municipality had sued and couldn't comment until he had a chance to read the complaint. In the past, PND engineers have defended their work and said the problem was faulty construction, not the design. The companies that worked on the construction weren't named as defendants.

Instead of a traditional dock on pilings, the new port design called for installing sheets of steel in U-shaped cells that would serve as the new dock face and be backfilled by sand and gravel to create new land. PND's trademarked design is called "Open Cell Sheet Pile." But the project, begun about a decade ago, has been fraught with problems.

Inexperienced, frustrated construction crews didn't get proper oversight from either ICRC or PND, the suit says. There were problems with quality control, and some of PND's calculations for the design were flawed, says the suit, which alleges professional negligence.


Rocks placed by one contractor to hold fill during the winter off-season were swept by tides or "ice plucked" into the construction zone. But no one warned the steel pile contractor, which futilely tried to hammer sheets through rock, the suit says. In fall 2008, the pile drivers logged 1,200 blows to move the steel just one foot in one especially difficult section. Neither PND nor ICRC ordered detailed inspections until much later, the suit said.

The steel sheets bent and twisted during installation and even if the new dock structure were built correctly, it might fail during a major earthquake, according to an analysis completed last year by CH2M Hill. Three of four new sections were not built correctly, according to the study for the U.S. Army Corps of Engineers and the federal Maritime Administration.

Even as the city blames the old Veco, now part of CH2M Hill, for some of the problems, it is relying on CH2M Hill for direction on how to salvage and complete the port project. Engineers with the old Veco "have been isolated from the current work at the port," Robert Owens, an assistant municipal attorney who helped craft the lawsuit, said in an email.

The lawsuit says "the conclusions reached by ICRC, PND and VECO with regard to the appropriateness of the (Open Cell Sheet Pile) system at the Project and seismic stability were wrong."

The 47-page complaint details the history of the project and its troubles. The city agreed back in 2003 to let the U.S. Maritime Administration manage the project contracts and technical features, even though it had never overseen a port development before. Much of the funding at that point was coming from federal earmarks, which since have dried up.

The Maritime Administration, known as MARAD, in turn contracted first with Koniag Inc., an Alaska Native regional corporation that received preferential bidding treatment under federal law, and then with a subsidiary, ICRC, to manage the construction. ICRC later was sold to VSE Corp., based in Alexandria, Va.

Like MARAD, ICRC was new at port construction.

In 2006, ICRC hired PND to design the port expansion. PND had a track record of building its steel cells, but was pushing the boundaries of the technology at the Port of Anchorage, the suit says. While PND officials have said in interviews that the length of the steel cells for the Anchorage port wasn't unheard of, the lawsuit contends otherwise.

In one critical section, steel sheets were 70 to 90 feet long, the suit says.

"The 90 foot sheet pile lengths are nearly twice as long as those used for previous open cell sheet pile projects," the complaint says. "Further, PND's own literature explains that sheet lengths exceeding 24 meters (78 feet) exceed the 'practical limit' of OCSP construction."

PND then contracted with Veco to review its cost estimates and the planned structure's stability, including during an earthquake.

If PND and Veco did a constructability review, "it was clearly performed in a negligent manner," the suit contends.

At PND's request, ICRC also put PND in charge of overseeing the sheet pile installation because PND said few companies had expertise in that area, the suit says.

"The problem in placing PND in this position is PND had blinders on," the suit said.

ICRC hired low bidder Quality Asphalt Pavement to install the steel cells, and QAP subcontracted the work to MKB Constructors, a joint venture composed of three Washington state companies. A competitor complained that MKB had only built a single small open cell project 20 years earlier.

Less than two weeks after construction began in July 2008, MKB asserted problems with the design. The contractor threatened to walk off the job.

During that summer, MKB had five serious safety incidents, according to the complaint. In one incident, a sheet pile connector hung up on a weld, and when the crane released it, the pile fell and hit a basket containing a worker, who suffered a sprained back.


The project has been essentially stalled since 2010. The suit does not say how much money the city is seeking, but so far more than $300 million has been spent in state, federal and port funds. The city has another $132 million in hand.

Mayor Dan Sullivan is considering the three options recommended by CH2M Hill to complete the project, Shalon Harrington, the mayor's director of intergovernmental affairs, said in an email Friday. The Assembly was briefed last week and its enterprise oversight committee will be involved in the decision, she said.

The options range in price from $377 million to more than $600 million, though the city could phase the work over time.

The mayor had planned to seek another $250 million from the Legislature this year. But a firm project plan won't be set in time, so the city is not requesting the funds this year, Harrington said.

Reach reporter Lisa Demer at or 257-4390.


Lisa Demer

Lisa Demer was a longtime reporter for the Anchorage Daily News and Alaska Dispatch News. Among her many assignments, she spent three years based in Bethel as the newspaper's western Alaska correspondent. She left the ADN in 2018.