Purple Line dispute continues on whether contractors can leave job in late August

Purple Line dispute continues on whether contractors can leave job in late August

State, contractors argue over contract details

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PurpleLine1

Tensions are heightening in the dispute between Purple Line contractors and Maryland officials over whether the contractors can leave the job.

The Maryland Department of Transportation and contractors have just over six weeks before the contractors plan to walk off the job on Aug. 22.

In a notice of termination of the $2 billion project with the state on June 23, Purple Line Transit Partners (PLTP), the consortium of companies managing the project, stated that the public-private partnership would be terminated within 60 days without a new agreement.

A day later, the state filed its own notice on June 24 that disputed that the contractors could leave the job. PLTP claimed the contract has an exit clause that would let it leave the project if the total delays reach 365 days.

The state wrote in its letter that “PLTP has not established that an extended delay occurred permitting PLTP to terminate for extended delay, and by providing such notice, PLTP is therefore in breach of the [contract].”

The state also claimed that the contractors would be abandoning the project and are contractually required to continue with work for the duration of the dispute on extended delays and cost overruns.

In its response on July 2, PLTP claimed that dispute “could last years before a lawsuit is filed and fully and finally adjudicated.”

On the same day as the state’s notice, Purple Line Transit Constructors (PLTC), construction contractors under PLTP, filed a notice to lay off more than 700 employees working on the roughly 16 miles of light rail.

The Purple Line would extend from Bethesda to New Carrollton in Prince George’s County. Silver Spring and College Park would be connected with 21 stations.

In PLTP’s response to the state, it denied that it was defaulting on the contract and said that officials “mischaracterized” the termination notice and contractual requirements “in order to support its incorrect assertion of an alleged … default for abandonment.”

PLTP wrote that it had a contractual right to terminate the contract and therefore couldn’t be abandoning the project. The consortium also wrote that the state ignored PLTP’s clear intention to continue its contractual obligations until the end of the 60-day period.

It said the state didn’t have a right to dispute its notice of termination and requested that the state withdraw it.

PLTP is formed in a partnership with Fluor, Meridiam and Star America. The companies that have partnered under PLTC include Fluor, Lane Construction Corp. and Traylor Bros.

The section of the contract concerning the right to terminate states that “if any extended delay results in 365 or more days of critical path delay, either party may deliver to the other party a notice of its unconditional election to terminate this agreement, in which case neither party shall have any further option to continue this agreement in effect.”

More than two months ago, PLTC said it would leave the job within 60 to 90 days after the state refused to pay for “extensive delays” and cost overruns.

Over the last three years, four issues of delays and cost overruns were caused by third-party lawsuits, delayed right-of-way acquisition and changes to regulations and third-party agreements after the project began, PLTC wrote.

Although tensions have continued between the state and contracts, PLTP wrote in its July 2 notice that it was committed to working out a settlement and resolution before terminating the contract.

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

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