ANCHORAGE, ALASKA — A federal judge allowed a lawsuit filed by Anchorage to proceed against the U.S. Maritime Administration over more than $300 million in failed construction at the city’s port.
The judge denied the administration’s motion for judgment concerning work done on the Port of Anchorage Intermodal Expansion Project more than a decade ago, The Alaska Journal of Commerce reported May 27.
U.S. Court of Federal Claims Judge Edward J. Damich rejected the maritime agency’s arguments that memorandums of understanding signed in 2003 and 2011 outlining the roles of the city and the administration were co-operative and therefore not binding agreements.
Agency attorneys argued the memorandums were more ceremonial in nature and did not make the government responsible for the project at the port, which was renamed the Port of Alaska in 2017.
The judge ruled the memorandums are “binding and valid contracts” that have not been voided largely because the administration spent at least $14 million in Municipality of Anchorage and State of Alaska money on non-construction project costs.
The expenditures included legal fees, audits, salaries and contract claims out of a total of $163 million transferred to the agency for the project.
The municipality sued contractors involved in the expansion project in March 2013. The dock designer maintains faulty construction methods caused materials supporting the docks to fail almost immediately after installation.
The costs that the maritime administration paid with city and state money “clearly fall within the guise of administrative expenses” and exceeded a three per cent administrative fee the agency was to receive under the 2003 memorandum, Damich wrote in the ruling.
Attorneys for Anchorage argued the administrative costs supported their assertion that the municipality “hired” the administration to oversee the project and therefore is liable for the work that went wrong.