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CH2M Hill gives detail to role of VECO in port expansion

Posted: February 23, 2014 - 8:29pm

ANCHORAGE — A CH2M Hill spokesman issued a statement Feb. 18 in an effort to clarify confusion over the role of VECO Inc. in the Port of Anchorage expansion project.

CH2M Hill purchased VECO Inc. in September 2007, and the Colorado-based engineering giant with nearly 3,000 employees in Alaska now has a contract pending with the Municipality of Anchorage to manage future construction at the stalled port project.

Approval of the contract has twice been delayed by the Anchorage Assembly as members have expressed concern over a possible conflict of interest regarding the municipality’s ongoing lawsuit against CH2M Hill regarding consulting work VECO Inc. performed on the sheet pile design used at the port. The municipality is also suing PND Engineers and former project manager Integrated Concepts and Research Corp.

Assembly members have agreed to take up CH2M Hill’s contract bid Feb. 25. The municipal Bidding Review Board met Jan. 23 and unanimously approved the contract proposal and found no conflict of interest in regards to the pending litigation.

In a statement provided to the Journal, CH2M Hill spokesman John Corsi wrote: “VECO was one of several sub-consultants engaged by (Open Cell Sheet Pile designer) PND (Engineers) in 2006 to complement their design team. VECO’s scope of work was to provide technical support to project scheduling and estimating, review of soil test data and properties provided by others and to conduct a single seismic stability analysis of an early OCSP concept design. VECO completed their scope of work in March 2007 and had no other participation in the subsequent design changes and completion of final design by PND, the engineer of record.

“VECO also had no role in the oversight of the pile driving and other construction.”

As part of its consultant work, a report prepared by VECO dated March 15, 2007, determined that the sheet pile design proposed at the time met seismic stability criteria for the project.

The initial construction management contract now pending before the Assembly at the port is for five years and up to $30 million, with extensions that could make it up to a nine-year, $54 million deal for CH2M Hill. If it isn’t approved, municipal officials have said the bidding would have to start over, something that could delay the process up to an additional six months.

CH2M Hill was also commissioned by U.S. Army Corps of Engineers for the municipality to evaluate the suitability of the sheet pile design employed at the port after construction challenges halted the project in 2010. That work was completed in February 2013, according to Corsi.

Further, the company was tasked in October 2012 to produce conceptual design alternatives for the Corps of Engineers and municipality, which were released in February 2013.

Attempts made throughout 2013 to contact CH2M Hill Alaska representatives about the company’s layered involvement in the Port of Anchorage project were unsuccessful. CH2M Hill is coming forward now so its involvement, particularly as it relates to VECO’s work, is fully understood by the Assembly, Corsi said.

The February 2013 suitability study prepared by CH2M Hill was cited numerous times in the complaint filed by the municipality March 8, 2013, against PND Engineers, former project manager Integrated Concepts and Research Corp. and CH2M Hill.

At a special Feb. 7 Assembly meeting held to discuss the management contract, Mark Lasswell a senior vice president for CH2M Hill said the company planned to move Lon Elledge, the program manager for CH2M Hill’s work on a port reconstruction and expansion project at Gulfport, Miss.

Lasswell said Elledge is “one of the select few we have, probably in the world, who is actually managing a project identical to (the Port of Anchorage).” He referred to Elledge as “unique” and “qualified” to lead the Anchorage project.

The Port of Gulfport was damaged considerably during Hurricane Katrina in 2005.

CH2M Hill’s contract for the Gulfport work, signed in 2008 for $3.03 million, has been amended in scope and schedule to total $35 million by 2015.

A copy of Elledge’s resume submitted as part of the contract management bid proposal provided to the Journal by CH2M Hill states that he has overseen environmental permitting, design, construction, budget and scheduling among other tasks since he started on the roughly $570 million Gulfport project in 2009.

It states that Elledge has 35 years of experience managing marine and general construction projects. A request to interview Elledge was denied until the Anchorage management contract is resolved.

Mississippi state officials have raised concerns over some of CH2M Hill’s expenses claimed at Gulfport.

Mississippi State Port Authority Commissioner Bobby Knesal said in an interview with the Journal that CH2M Hill is “doing a good job as far as managing and everything,” but that some of their fees have been “excessive.”

An invoice from the company to the Port Authority for the four-week period from June 1, 2013, to June 28, 2013, listed travel, lodging, office and apartment rental, telephone, parking, and equipment charges totaling $14,690. After meeting with CH2M Hill officials, Knesal said they agreed to “cut back” on some of their expenses.

“We were paying the lease for an apartment they were renting for people who flew in a couple times a month and I just thought that wasn’t appropriate,” he said. “They’ve been here long enough; they should have established their residency.”

The average wage for 18 CH2M Hill managers and engineers listed on the invoice was $150.70 per hour. Knesal said the wages were not in line with local companies, as he said they should be.

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