2020 | Transportation

Purple Line builders file countersuit against state for cost overruns, delays

Lawsuit claims Maryland breached contract, seeks more than $100M

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Contract disputes, delays, cost overruns, years of negotiations and a lawsuit have been haunting the Purple Line project. Now, another lawsuit has been filed — the companies in charge of constructing and operating the project are countersuing the state, seeking more than $100 million.

In a lawsuit filed Tuesday in Baltimore City Circuit Court, Purple Line Transit Partners (PLTP) claimed that the state breached its contract with the consortium and caused cost overruns and delays.

The claims are not new to the dispute over the 16-mile, 21-station project, which is planned to stretch from Bethesda to New Carrollton.

Purple Line Transit Constructors (PLTC), the design-build contractor for the light-rail line under PLTP, notified PLTP on May 1 that it intended to walk off the job if the disputes were not reconciled. Since then, the Maryland Transit Administration and PLTP have not been able to come to a negotiated agreement.

On Aug. 10, the state obtained a temporary restraining order to keep PLTP from leaving the project through Sept. 14. But on Sept. 10, a judge allowed the restraining order to expire immediately and denied the state’s request for a preliminary injunction.

In the countersuit filed Tuesday — first reported by The Washington Post — PLTP said the state breached the contract by “failing and refusing to provide PLTP monetary and schedule relief.”

The companies also said the state directed them to “mask dates” related to project delays that are required to be included in schedule updates. This included directing PLTP to “mask the impacts of delays caused by the state’s untime ly acquisition” of right-of-way parcels for the project.

Other contract breaches include not complying with requirements for certain meetings related to termination of the contract and obligations such as finalizing a transition plan for the project, according to the lawsuit.

As a result of the state’s “many breaches,” PLTP is seeking damages in excess of $100 million, the companies wrote in the lawsuit.

Among its requests, PLTP asked the court to grant an “amount to be proven at trial,” as well as interest and costs in bringing the lawsuit against the state.

The state, in its suit, is seeking $75 million in damages from PLTP.

John Undeland, a spokesman for PLTP, wrote in an email to Bethesda Beat on Friday morning that he couldn’t comment on the lawsuit.

“We are coordinating with the state on transition in order to turn the project over in a safe and secure manner within the next four weeks,” he wrote. “At the same time, we continue to believe that a settlement is in everyone’s best interest and we’re open to all available mechanisms to enable that to happen, including mediation.”

In a separate comment in an email to Bethesda Beat Tuesday evening, Undeland wrote that leaving the project “is the last thing we want to do.”

“However, after years of negotiations with MTA on delay issues that we had no role in creating and for which the state has provided no meaningful relief, we felt we had no choice but to pursue termination,” he wrote.

“The combined effect of the disputed issues totals more than 900 days of delay. It is simply unreasonable and economically unviable for any contractor to absorb such profound delays without meaningful relief.”

Erin Henson, a spokeswoman for MDOT, did not immediately respond to a request for comment Friday morning.

The judge’s order allowing the contractors to abandon the project leaves the state with two choices: complete construction on its own or hire another contractor.

At a Montgomery County Council meeting on Tuesday, Kevin Quinn, administrator of MTA, told the council that officials expect to have a short-term plan to keep subcontractors on the job, increase staff members to manage the contracts, and determine which parts of the project will be delayed because of the transition.

The state will decide in the next four to six months who will finish building the line. A number of contractors have contacted the state with interest in taking over the project, Quinn said.

“In the short term, we’re focused on keeping the construction moving forward on this project into the winter and really coming out with a solid long-term process underway,” he said. “I want to be honest — I’m not going to sit here and say there won’t be stumbling blocks along the way, or make commitments that the state is going to be able to maintain that same level of activity happening that PLTC had going on in the next few weeks and months.”

Briana Adhikusuma can be reached at briana.adhikusuma@bethesdamagazine.com.