Alaska Journal | Anchorage Wins Federal Lawsuit

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Lawyers for the city of Anchorage, with a little outside legal help, did something many said they shouldn’t even bother to try: they beat the federal government.

Senior Federal Claims Court Judge Edward J. Damich ruled for the Municipality of Anchorage on Dec. 9 in the city’s lawsuit against the U.S. Maritime Administration, commonly known as MARAD, for the federal agency’s role in The failed Anchorage port expansion project nearly eight years after city officials filed a lawsuit.

As a result of the decision, Anchorage Mayor Dave Bronson called it a “victory for Alaska”, given that the city-owned port is the import terminal for most of the country’s goods. consumer and industrial used statewide.

The Anchorage Assembly officially renamed the facility the Port of Alaska in 2017 to highlight its importance to the state as a whole.

“The court ruling comes at a crucial time as we work with state and federal partners to secure nearly $ 1.6 billion to repair the port, to ensure our supply chain remains intact and to ensure food security. of our citizens, ”Bronson said.

Sections of Alaska’s main harbor are almost 60 years old, and repairs to the heavily corroded piles that support the current docks are almost constant every summer.

Damich has ruled unequivocally in favor of the city, but it’s not clear whether or not Anchorage will get the $ 367 million requested by city attorneys. In addition to its ordinance asserting the responsibility of MARAD for the ultimately poor quality work performed there is over ten how much was originally spent on installing the structure which ultimately failed.

In sum, over $ 300 million of public money was spent on the project with little result.

The city also sued several project contractors, including PND Engineers, who designed the sheet pile system used to build the new wharf. PND representatives have consistently said that a faulty installation caused damage to the structure, a claim backed by construction companies that previously worked with the design.

A city-commissioned study conducted by PND competitor CH2M Hill concluded that the design was incompatible with the glacial loamy soils that underlie the region. The municipality finally settled this case for $ 19.3 million with seven contractors. The municipality settled with PND Engineers for $ 750,000.

Deputy City Attorney Robert Owens said the sheet pile spending ordinance was intended to clarify minor differences, such as transposed numbers, in the claims numbers used by city lawyers across thousands of pages of documents filed in court since the case was brought in March 2014..

The only attorney in town to have worked through the entire lengthy trial, Owens called the initial idea of ​​suing the federal government “intimidating” while admitting he had no idea what it was. meant.

“Some government lawyers have casually told me that there is no way the municipality can sue and win against the federal government. It seemed like uncharted territory as far as I was concerned, ”he said.

Former Mayor Dan Sullivan, whose administration filed the complaint, initially downplayed the likelihood of suing MARAD, as winning a claim against a federal agency is often viewed as an unlikely achievement.

The decision came nearly 10 months after a nine-day trial last February on Zoom.

Damich decided that the 2003 MoU transferring oversight of the city’s large and complex construction project to MARAD legally required the agency to do everything in its power to produce a bigger and better port for Anchorage.

Lawyers for the Department of Justice argued that the MOU simply clarified the decision-making authority of Anchorage officials for the project and that it was the city’s responsibility to provide requirements and guidance to MARAD for the project.

Damich made it clear in his 28-page order that he did not agree with this argument.

“Each witness confirmed that MARAD’s role under the 2003 MOU was to build the port – which is exactly what MARAD attempted to do. This is clear proof of MARAD’s duty to deliver the project to Anchorage, ”Damich wrote.

He added that if Anchorage was in charge of the work, the city would have been the entity hiring and firing contractors, actions carried out by MARAD.

A 2013 audit by the Inspector General of MARAD concluded that agency officials did not adequately plan or monitor the work carried out at the port and sometimes did not comply with federal procurement requirements. . Anchorage was the first in a series of port projects undertaken by the agency in the mid-2000s. MARAD began to manage the construction of infrastructure so that federal money could be allocated more quickly to specific projects.

Owens said while nothing is certain, he doesn’t expect the decision to be appealed, but city officials also don’t assume there will be any. money that will come out of it. The court ruled that MARAD had broken its contract but did not discuss the merits of the damages, according to Owens.

“I hope the court will be ready to move forward with its second decision on damages,” he said.

Anchorage Assembly member Christopher Constant said he was skeptical that MARAD would honor its obligation even if Damich orders payment.

“It’s a good thing the court ruled that the federal government misdirected this project and not the mun, but cynics say it’s going to take as long as it did to get that decision – whatever it is – seven years or something, “he said.

Constant chairs the Assembly committee with responsibility for port oversight. He said it will likely take a strong push from the influential Alaska Congressional delegation to secure what, if anything, is granted by the government.

Owens noted that there is a government fund from which judgments against the agencies are paid, again stressing that a significant judgment is not guaranteed despite the ruling.

He also thanked other city officials and the four Anchorage mayors for their support during the case.

“Overall, every administration really supported him and was open and asked good questions,” he said.

Port manager Steve Ribuffo said the move is positive, but will not slow down what is being done to secure other sources of federal money, some of which could come from the infrastructure bill. $ 1.2 trillion passed by Congress and signed by President Joe Biden last month.

“We’re going to continue and work on the grant application side as if this (decision) hasn’t happened yet,” Ribuffo said.

Work is nearing completion on the approximately $ 200 million oil and cement terminal located at the southern end of the port facilities. The two-year project was the first in a series of individual infrastructure replacement projects that must be carefully sequenced to allow the port to remain open during construction.

“We are at the start of the loading dock design process, which is the next phase of the program,” said Ribuffo.

Elwood Brehmer can be contacted at [email protected].

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