Contractor STG is seeking more than $99 million in damages, and says HART “has only itself to blame.”

The contractor hired to build the 5-mile airport segment of the Honolulu rail line is suing the Honolulu Authority for Rapid Transportation, alleging HART’s failure to address problems with the relocation of utilities along the line has caused expensive construction delays.

Contractor Shimmick/Traylor/Granite Joint Venture alleges HART’s actions are a breach of its contract with the company, and is seeking more than $99 million in damages and interest.

STG alleged in the lawsuit filed Thursday that HART was warned well in advance about issues related to utilities in the path of the project, and HART told bidders it was aware of the danger and was coping with of the problem.

“HART’s description of utility coordination as an ‘Achilles heel’ has proven, albeit unfortunately, accurate,” according to the lawsuit. “This suit is the direct result, and HART has only itself to blame.”

STG was awarded an $875 million contract in 2016 to build four stations and about 5 miles of elevated track from Aloha Stadium to Middle Street.

Construction at the HART Rail station located at Daniel K. Inouye International Airport.
HART is being sued by one of the rail project’s contractors who alleges the agency caused costly delays that cost the company significant money. (Cory Lum/Civil Beat/2022)

Kevin Whitton, vice president of Pang Communications, issued a written statement on behalf of HART Friday afternoon that said “HART respects STG and the work the joint venture has performed on the Airport segment of the Honolulu rail project, but disagrees with the characterization in STG’s lawsuit of the nature of the claims and the alleged damages suffered.”

“HART Executive Director and CEO Lori Kahikina takes HART’s relationships and obligations very seriously, primarily its obligation to protect the taxpayer and to be prudent in the spending of taxpayer monies,” the statement said.

The statement continued: “While the issues described by STG arose prior to Kahikina’s administration, HART has been in active negotiations with STG about these claims for over two years in an effort to reach a fair settlement. HART continues to work with STG daily to complete the next segment of the project.”

The lawsuit alleges HART assured STG that the rail authority “had taken effective steps to ensure the utility line relocation work would not hinder or delay STG’s ability to timely construct the AGS guideway.”

HART also allegedly told the bidders the utility relocation designs were 90% complete, and claimed it had agreements with Hawaiian Electric requiring the utility to promptly review design work to allow construction to promptly move forward.

HART promised that the contractor would be allowed additional time to finish the job if there were delays in getting Hawaii Electric to approve the utilities, or if unmapped utilities were discovered along the rail route, the lawsuit also alleges.

In fact, the lawsuit says the designs that were supposedly 90% complete were not nearly that far along, and HART took more than a year to provide crucial design-load data from the time HECO demanded it. That data was needed for STG to complete the design work, according to the lawsuit.

The lawsuit specifically cites “significant delays” in the design submittal and approval process for work that needed to be done in the Ualena Street and WaiWai Loop area.

When STG presented evidence of those problems to HART along with the impact they had on the rail construction schedule, the rail authority took three years to negotiate and execute change orders to address the delays, according to the lawsuit.

In the meantime, STG was forced to absorb the cost of those delays as well as other utility relocation delays including an unexpected AT&T fiber line that was discovered “hanging in the path” of rail construction, the suit alleges.

“STG has not been equitably compensated for the delays caused by untimely reviews, revisions, and approvals of STG’s utility infrastructure designs,” the company alleged.

The company issued a written statement saying that “we are exceptionally proud to work on the Honolulu Rail Transit Project – a project that will benefit Hawaii now and for years to come. We are disappointed that HART continues to neglect its obligations and to avoid taking responsibility for delays outside our control.”

STG said in the statement it “would have preferred to have resolved this matter amicably with HART, and have endeavored many times to do so, without success.”

“The STG contract with HART requires the contractor to file an action in state court within a prescribed period of time or it waives such rights,” STG said. “The joint venture partners have a long and proud histories of providing excellent service to our customers across the country. We will continue to not only meet but exceed expectations.”

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